Outsourcing is a common occurrence in most companies, and outsourcing of the Information Technology groups can save huge costs affecting the bottom line. However, when companies outsource the main applications software group, this can have a negative effect on the overall efficiency of the business and in the long term may cause a company to be less profitable than before and cause disruption of the business.
To remain competitive in today's global economy, companies must look to reduce their costs and improve their operational efficiency. This is the case at my workplace, where we have already outsourced our entire manufacturing operations. This was quickly followed by outsourcing the I.T. helpdesk and desktop support staff. The decision to outsource these functions was purely a financial one. With the decision made locally, as was the case for the manufacturing outsource, it has proved to be financially successful. However, our corporate headquarters decided that we must outsource the I.T. helpdesk; we had been told that we would save 15% on our I.T. costs. Being responsible for the budget, I can state that our costs in the area actually increased by 5%.
We have now lost the flexibility to respond rapidly to the business needs. Prior to outsourcing, if there was an issue that needed people to stay late, or work on some critical issues, all we needed to do was simply organize the members of the team to be available. As they were part of the same company, they were happy to do this. The problem that now occurs is that we need to give many day's notice, which is not often possible, and the result is that we are sometimes late shipping products to customers.
The original I.T. team possessed good knowledge about the business. Some previous employees were offered jobs by the new company, but many were not. This had the effect of losing a great deal of "tribal knowledge." When this happens, it takes the new staff much longer to understand the present systems and procedures, affecting the timely resolution for customer problems.
