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Things to Avoid when Outsourcing IT Processes

by: Sarah Joson

Wednesday, March 11, 2015 |

Christian McBeth is an IT expert, known for his contributions in various tech firms including Fortune 500 clients. He recently posted an article at CIO.com which focuses on the common mistakes committed in the world of information technology (IT) outsourcing.

Outsourcing has long been commoditized in the global economy. In fact, almost anything can be outsourced today, including back office functions and complex processes such as information technology which requires a certain level of proficiency.

Here are four ways IT outsourcing buyers should avoid when outsourcing IT functions:

Directing all your efforts on saving money
Your budget is an integral part of the operation, but putting all your efforts into watching it fluctuate will do your operation no good. By anchoring your entire goal on cutting costs, you are limiting the potential of your project, and putting the entire operation at risk.

When outsourcing, there are several things that IT executives should focus on apart from the budget: the core competencies of the company, available skillsets in-house, turnaround time, goals and objectives, and of course, the risks.

Overlooking the red flags
Since IT processes are vulnerable to threats and issues, some executives ignore the basic concerns that are sent their way. But anybody who’s in the IT industry knows that the more you ignore the risks, the more dangerous it will become, which could lead to a spoilt outsourcing partnership. It could also put confidentiality and security in jeopardy, which is why you need to take immediate action.

For instance, create a solid agreement that covers engagement and room for negotiation so that you and the provider can manage expectations and streamline communications. On top of that, you would need to clarify how effectiveness is measured so you can point out which areas need continuous improvement.

Putting the total cost of ownership aside
Some CIOs who dabble with outsourcing fail to look beyond what is handed to them by the IT outsourcing provider. Whatever is included in the invoice would be the only stats that will be included in the balance sheet. They tend to forget that the total cost of ownership, which includes internal project management, integration, alignment, as well as hardware and software, also drains the budget.

Ignoring the reactions within your organization
People will have a hard time adapting with the changes brought on by the outsourcing operation. Instead of telling them to deal with the changes, hear them out - they might have a crucial input that can help improve your operation and avoid drops in productivity and engagement.

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