IT Outsourcing Decisions - Concerns

Outsourcing of IT Services is the trend of today, and why not it helps an organization in focusing towards its core business where the strength lies. Why should an organization spend the time, effort and other resources where it does not specialize and which is not its core area of operations.

The first and foremost thing that is considered while taking the step of outsourcing is the selection of the right company. Yes, it is very important to select the right company to execute the outsourced job and in the manner and with the effect as the outsourcing organization would prefer it to be conducted. But is it the only requirement in outsourcing scenario? May be most out there would say ‘Yes’, but there is a difference somewhere, somewhere we are lagging. Why shall we just focus on the efficiency of the outsourced Company’s delivery mechanism and why not address the some other issues? Other than the effective and efficient delivery mechanism followed by the Outsourced Company, there are other areas that are more important and rather critical to the success of the Outsourcing Model being followed. These issues are rather related to the mechanism followed by the Outsourced Company to address the security risks involved in the overall outsourcing model.

For instance lets’ have a look at the US market that is one of the biggest market for the Outsourced Business Process concept. The organizations there are increasingly outsourcing their IT divisions including their IT Security set-up. Certainly to manage the growing cost of managing the IT establishment and at the same time to focus on the more profitable Business Divisions/Processes.

But then there is a flip side of the decision and that might have more of impact than the benefits. The flip side is for the obvious risks associated in outsourcing the IT function; the function that deals with processing and storage of the information that even includes critical and business sensitive information.

Now, coming from an Outsourcee background and being and being one of the Lead Consultants on the Outsourced jobs for my company, I would be one of those in the bandwagon to support the Outsourcing trend. Why should not I and why should I ever oppose it? After all I get my bread and butter from the outsourced jobs.

But just because I am an Outsourcee I should defy the fact that there is no risk in the Outsourcing models and approach as being followed? Should I just try to conceal the fact that when an Organization outsource a process to a third-party, be it for desktop support, security testing or network monitoring, the more accessible the electronic assets are and the greater is the risk of something bad happening. There is always a potential for loss increases given the seemingly endless amount of data stored processed and transmitted through so many different devices.

Though it might seem to be but it would not be a wild statement to say, “While most IT consultants are trustworthy and responsible, some might not. Seemingly not so bad people are doing bad things on computers all the time – and often the company who hired them doesn't even realize it.”

Let us examine the various risks that are associated with the outsourcing decision and then we can look into the aspects or steps that would help us in making the appropriate decision on outsourcing and what to outsource.

Concerns of Outsourcing

As every aspect of business has inherent concerns and the related risks, so is with the decision to outsource. Making a decision with the knowledge of these inherent risks makes life easier as we would be ready to take steps to avoid any materialization of these risks and avoid any adverse impact of the business profitability.

So what are the risks? and where they exist? are the main questions to be known. Let’s have a closure look at the risks that exist with the decision to outsource –

n Loss of Control

n Availability v/s Quality

n Mutual Trust

n Costs – Real and Uncertain

n Knowledge Transfer

n Shared v/s Dedicated Operations

n Legal and regulatory Compliance