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IT Outsourcing In Today's Business World

Nov 29, 2007
Boston and New York companies that have their own IT departments are facing tough decisions on whether to outsource IT administration, IT management, programming and application development, and network maintenance tasks. Foreign currencies have risen making offshore IT services prices no so much of a bargain anymore. Although many IT services contracts are written in US dollars, seemingly creating savings, foreign providers will cut back services. Some may suggest those IT services are not all they're cracked to be to begin with.

Some IT department managers have ventured overseas for network design, infrastructure development, application programming and development, and other high level IT management matters, and have discovered later, many costly issues they weren't counting on. Language problems, unmotivated and unskilled staff, poor IT helpdesk support, lagging technology, and inabilities understand and fulfill contractual obligations.

With the falling US dollar, your next IT outsourcing work may just be done by an IT firm in Boston or New York.

The long term outlook for US businesses is very good. With the lower dollar many companies are becoming hypercompetitive, meaning US companies who have always enjoyed technology advantages now have a more favourable currency exchange environment to provide better value. And with some IT firms in the Boston and New York areas, you may have access to outstanding trained technical staff, network designers, hardware support specialists and even on-site support services.

The economy may be slow to recover so hiring new IT staff, purchasing new software and hardware for your IT operations may not be a wise choice. Specialist IT support firms can offer complete IT services and support leaving you to focus on your core business activities. If you're going to be in business in future, you need to focus on your business strengths and prepare for the years ahead. Trying to be an IT firm is outside of your business goals. If you can outsource these difficult and time consuming tasks to a local IT service provider that can scale up their operations as your small business grows, you've got a great solution at hand.

US IT Providers Economical Now and are Competent

The lower US dollar value against foreign currencies is making overseas outsourcing a less viable choice. The Euro has risen almost 40 cents against the US dollar and the Rupee and British Pound have leapt in value. It's a trend Forex experts and economists expect to continue. Although the Bank of India has desperately tried to prop up the Rupee, it's all for nought since everyone is selling their US dollars and even India is being forced to divest its US dollar holdings. The trend is overwhelming and persistent and the lower US dollar will continue.

The prognosis for overseas IT outsourcing then is dim. That's a good thing since you and your staff are bound to enjoy better service and solutions locally. Don't underestimate the effect of frustration in dealing with foreign overseas providers.

The choice of outsourcing IT shouldn't be taken lightly either since your businesses vitality and existence is dependent on information technology. A few managers don't realize how dependent they've become on information technology services. But this isn't the old days. IT firms have advanced in quality, particularly with respect to support on original manufacturer software and hardware support. Foreign providers for instance are often use software that is either illegal or outdated. They don't have access to current support documents and the programming errors that result could be catastrophic business wise and legally.

Outsourcing IT Services

IT managers, CIO's and CEO's should always take care making an IT outsourcing deal. They should consider carefully how their outsourcing model fits within their particular IT landscape. They should also consider how costs could escalate. This is a key issue with offshore providers since they are on the other side of the world and are sleeping when IT departments are working. Nightshift IT support staff that have language problems may test the patience of your IT staff. Foreign programmers are notoriously disconnected from mainstream, above board business and therefore may not even comprehend the issues they'll face when creating custom applications for the latest projects and hardware. In fact, their solution could end up being unusable leaving you back where you started.

CIO's should analyse the degree of IT centralisation and the role of IT in the overall performance of their business and consider how to manage outsourced IT and staff resources when outsourcing. Many will find the IT functions are barely under their control at times and when suppliers and customers are tied into the same information technology solution, the downside risks could be substantial. The loss of a key customer is never considered in the original outsourcing plan. However, if your ship starts to sink, it's hard to imagine why your customers wouldn't consider other sources and partnerships.

Taking these steps allows a company to properly evaluate what sort of IT outsourcing model will suit it best - with Forrester identifying six basic outsourcing models that businesses might follow, from global outsourcing of all IT apps and infrastructure to a vertical outsourcing of certain apps and infrastructures.

Forrester Research found in a recent study that poor quality of in-house IT is often an argument used by top management to support decisions to outsource.

Management however was too quick to assume that overseas suppliers might be just as inadequate and that it might open a Pandora's Box of problems. The moral in IT outsourcing is simple. IT managers need to consider the full range of logistical and management issues involved when outsourcing IT services and management.

Local IT firms offer a surprisingly rich set of management and support services and now at costs that compare with overseas solutions. The business compatibility of local providers in the Boston and New York area is very strong of course and on-site support is a key value in keeping you in tune with what's happening and managing IT well. Choose a local Boston IT firm or New York IT firm and 'find they'll be your best business asset.
About the Author
Boston IT Consulting, and New York IT Consulting experts analyze and optimize your networks performance. IT outsourcing, consulting and management capabilities.
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