Outsourcing IT resources can become a matter of debate within both new and preexisting organizations. How does in house IT versus outsourcing affect operational and production costs? Outsourcing is not a fit for every organization and neither is in-house IT teams; therefore managers and stockholders much weight the benefits and possible risks.
Determining Factors for IT Outsourcing
Financial- An organization may spend less money on the IT portion of their company if they do not have an in house IT department. Having an internal IT department would mean the need for upkeep in training, an expected pay rate comparable to the work needed, materials/supplies, and space. An internal IT department would also mean setting up interviews and keeping record and management of that particular team. All of these will have costs. The cost would include payroll for the employees, prices of needed materials and equipment, and up-training (classes), and managerial personnel (Flatworld Solutions, 2015).
An outsourced IT department typically proves to be a lower overhead cost. There is usually a much lower cost of labor in non-western countries (Flatworld Solutions, 2015). An internal IT department will involve multiple events such as hiring, meetings, reviews, and other interactions between management and employees. There is also the benefit of having a work completed while the company is closed. The outsourced IT will have access to the organization and can complete work.
One of the largest benefits is experience. When outsourcing, a company can rely on a resource or department that specializes in what the company needs (Flatworld Solutions, 2015). Therefore the company is supplied with expert service and a lack of hassle when it comes to ensuring the employees are up to date in training and ability.
Factors against Outsourcing
A manager could be against outsourcing for many reasons. Some of these include (Outsource2India, 2015):
Potential loss of control