Why outsource it services

Offshore outsourcing The type that sending IT Outsource workers to working in a foreign country. Nearshore outsourcing The type that sending IT Outsource workers to working in neighboring countries. The popular service types of IT Outsourcing. Application Support or Management.

Technical Support Helpdesk. Database Development and Management. Online Threat Protection. Networking and Communications. Data Management. Data Storage. Hardware support and installation. Software and Network support. Advantage and disadvantage of IT Outsourcing Service. Disadvantages of IT Outsourcing Service Worker not belong to the company Less acknowledgement about company Less effective than internal team not always Has to share some confidential data Lose some control in company.

Improve business focus. Gives business access to the experts. Fiserv Fiserv Drive Brookfield, Wisconsin www. Washington, D. Price Waterhouse Thomas O. Box Solana Beach, California www. Unisys P. Box Blue Bell, Pennsylvania www. Making the right moves now can help you mitigate any surprises heading into Worldwide leaders in public and management accounting. Toggle search Toggle navigation. Breaking News. Therefore, they must advise clients or companies on using outside vendors to manage and support IT.

CPAs should weigh carefully the numerous risks and benefits when advising clients or considering outsourcing for their companies. Today, IT outsourcing generally is defined as contracting with outside vendors to do various IT functions such as data entry, data center operations, application maintenance and development, disaster recovery and network management and operations.

Vendors may be individual IT professionals, consulting firms, employee leasing companies, full-service providers and CPA firms. Vendors may save money because they Have much tighter control of fringe benefits and run much leaner overhead structures. Use low-cost labor pools more aggressively and, with the help of modern telecommunications, can move data centers to low-cost areas.

Apply world-class standards to the companys existing IT staff, all of whom have to requalify for appointment at the time of outsourcing. Can employ more effective bulk purchasing and leasing arrangements for all hardware and software. Have better control over software licenses because they often are more informed negotiators. Must meet deadlines because of contractual pressures. What Companies Say The dimensions and the related perceived benefits of outsourcing have grown dramatically.

The top-five short-term pros include Lower operating costs. Access to the outside providers lower cost structure is one of the most compelling short-term benefits of outsourcing. More capital funds. Outsourcing reduces the need to invest capital in noncore business functions, thereby making capital funds more available for core areas.

Outsourcing also can improve corporate financial measurements by eliminating the need to show return on equity from capital investments in noncore areas. A cash infusion. Outsourcing can involve the transfer of assets from the client to the provider.

Equipment, facilities, vehicles and licenses used in current operations all have a value and are, in effect, sold to the provider as of the transaction, resulting in a cash payment to the client. Access to new resources. Companies may outsource because they do not have access to the required resources within. For example, if an organization would like to expand its operations, especially into a new geographic area, outsourcing is a viable and important alternative to building the needed capability from the ground up.

Better overall IT management. Outsourcing is certainly one option for managing an out-of-control IT function. Outsourcing does not, however, mean abdication of management responsibility, nor does it work well as a kneejerk reaction by companies in trouble. The top-five long-term benefits are Improved business focus. Outsourcing lets the company target broader business issues while leaving operational details to an outside expert.

For many companies, the single most compelling reason for outsourcing is to relieve management of the how issues that siphon off huge amounts of managements resources and attention. Access to world-class capabilities. By the very nature of their specialization, outsourcing providers bring extensive worldwide, world-class resources to meeting the needs of their customers. Accelerated reengineering benefits. Outsourcing is often a byproduct of another powerful management toolbusiness process reengineering.

It allows an organization to realize immediately the anticipated benefits of reengineering by having an outside organizationone that is already reengineered to world-class standardstake over the process. Shared risks. There are tremendous risks associated with the investments an organization makes. When companies outsource, they become more flexible, more dynamic and better able to adapt to changing opportunities. Free resources for other purposes.

Every organization has limits on the resources available to it. Outsourcing permits an organization to redirect its resources from noncore activities to activities that have a greater return in serving the customer. Due-Diligence Checklist Useful questions to help CPAs determine if a vendor has the right resources and experience their companies or clients need. What is the vendors reputation? Are there any conflicts or problems?

Will the vendors culture fit with the companys or clients? What is the vendors history? How long has it been in business?

Have there been any unusual peaks or valleys? Is the vendor financially secure? What is the vendors market share? Are there any pending or threatened claims that could affect the vendors financial standing? Has the vendor acquired or divested entities recently? Ask for a copy of the most recent financial statement or annual report. How is the vendor organized? Here are four of the most common:.

Companies outsource IT to have vital computing tasks performed by the most skilled, qualified hands. Here are a few cons to outsourced IT services :.

If your company has had cost concerns and downtime due to hardware and software issues, now is the time to outsource your IT. Contact us today to learn more about our services.