Outsourcing of IT Managed Services

Challenges and Solutions

Threat to Security and Confidentiality
The vital asset of any business is the information that keeps it running. Whatever you have as information assets, intellectual property or any other confidential information that would be exposed to the outsourcing organisation, there is a risk that the confidentiality may be compromised. If the outsourced function involves sharing proprietary company data or knowledge, this must be taken into account. Evaluate the outsourcing organisation carefully and prepare NDA to make sure your data is protected and the agreement has a penalty clause if an incident occurs.
Do you have action plan and implemented process prior of the incident? Communication plan?

Service Level Agreement
The outsourcing organisation will be motivated by profit. Since the agreement will fix the price, the only way for them to increase profit will be to decrease expenses or ask Prima Net Consult why strategic approach introduce best value. As long as they meet the conditions of the agreement, you will pay. Conditions must to be described into SLA document for each particular service. In addition, you will lose the ability to rapidly respond to changes in the business environment as cheap service and quick response to a changes are self-excluding. The agreement usually will be very specific and you will pay extra for changes.
Do your SLAs use measurable services? Are you use strategic approach in IT Managed Services?

Covered Costs by the agreement
Signing an agreement with the outsourcing organisation that will cover the details of the service that they will be providing. Anything not covered in the papers will be the basis for you to pay additional charges. Obviously, this is the outsourcing organisation's business. They have done this before and they are the ones that write the template of the agreement. Expectedly, you will be at a disadvantage when negotiations start.
Do you have clearly defined services and service levels? Do you have an option to “burst” in demand for the service or quickly add/remove new services?



Transfer of Managerial Control
Whether you sign an agreement to have another organisation perform the function of an entire IT department or single task, you are turning the management and control of that function over to them. True, you will have an agreement, but the managerial control will belong to external organisation. Your outsourcing organisation will not be driven by the same standards and mission that drives your company. They will be driven to make a profit from the services that they are providing to you and other businesses like yours.
Do you have a governance framework prepared?

With all these pros and cons of outsourcing to be considered before actually approaching a service provider, it is always advisable to specifically determine the importance of the tasks which are to be outsourced. It is always beneficial for an organization to consider the advantages and disadvantages of offshoring before actually outsourcing it.
As the list above is not exhaustive, what do you think is the most dangerous disadvantage of IT Managed Services outsourcing?