An Analysis Of The Efficiency Of Outsourcing

At the present time, IT-market is keen on the idea of IT services outsourcing and in this regard, the task of outsourcing efficiency evaluation requires a solution, as it is considered that IT services outsourcing can minimize the costs of information technologies use.  Moreover, if to stand aside from the general phrases and advantages, which are described in periodicals, the efficiency of IT-services outsourcing is not so definite. When making the decision on outsourcing one should analyze the financial and organizational expenses without ignoring the risks that arise in the process of IT services outsourcing arrangement. The lack of full-fledged analysis during the decision-making can result in tangible losses instead of benefits. The providers of the outsourcing services have the methods for the outsourcing efficiency calculation, but in the majority of cases, they show the financial advantages and very often leave the possible losses from the arising risks out of the analysis. Many companies after some time give up on outsourcing and return to the previous model of the IT department organization. Therefore, the task of the outsourcing efficiency analysis requires the decision for each company separately. Grow Your Staff describes below how to evaluate the efficiency of your outsource employees properly.

Outsourcing — efficiency analysis

For the decision making it is necessary to define the current costs for the service rendering, the cost of such service by the outsourcing company, the cost of the processes and the actions of interaction with the external provider, and also to assess the risks that arise in the process of transferring of the given service to the outsourcing. And the definition and assessment of risks can be decisive in terms of making this decision, so the lack of risk analysis in the analysis of outsourcing efficiency is a regular error in making this decision. The transition to the outsourcing model in the delivery of IT services leads to the emergence of many risks associated with changes in processes as well as with changes in the performer.

Besides the current expenses and losses from the possible risks, it is necessary to provide the expenses for the creation and fulfillment of the processes to control the actions of the outsourcing company and contractual work. A typical mistake is the withdrawal of all IT expertise from the company, which leads to an overestimation of costs in the provision of IT services. The result of increased prices from external suppliers is the lack of IT expertise within the company, which leads to the dictate of inflated labor costs and prices from the IT suppliers. Therefore, when organizing a service model of IT management, it is necessary to provide for a certain competence within the company on this issue. It could be the customer service, which organizes the collection of requirements from business units and organizes their transfer to the outsourcing company, contractual work, and control over the possibility and completeness of the realization of the formed requirements. In fact, the internal efficiency analysis can be divided into three separate parts. These are cost analysis of service rendering, analysis of possible risks arising during service rendering and the cost of organization and performance of control processes for external suppliers.