The recent economic downturn has many businesses focused on not just making a profit, but simply surviving. Although ways to maintain or even increase revenues are a priority, finding the means to reduce or eliminate unnecessary expenses are also high on a manager’s list. A common cost-cutting measure being taken is the elimination or layoff of staff. Another is the delaying of planned projects, such as upgrading computer software and hardware.
Increasingly, businesses are finding themselves between the proverbial rock and a hard place. They realize specific IT projects need to be completed for the business to develop, but are unable to react lacking the necessary staff or the budget to do so. Lacking the ability to hire full-time staff or the capital necessary, they must look for affordable alternatives. One such option, particularly for smaller businesses, has been to outsource many of their IT needs.
Outsourcing continues to prove advantageous during both economic upswings and downturns. During an upswing, businesses can use outsourcing to improve performance. Conversely during an economic downturn, outsourcing can assist in keeping a business competitive while reducing operating costs.
Outsourcing remains an effective and popular tool for small and medium size businesses (SMEs) trying to control expenses. According to 600 small-business respondents in an oDesk.com survey released in March 2009, 41.9 percent indicated they planned to outsource more in the near future. The primary reasons included the inability to hire full-time staff (34.9%) and staff cuts (7%). Surprisingly even with a recession in full-swing, 28.5 percent planned to outsource projects they previously had not.
SMEs often do not have the luxury of hiring IT staff to handle their technology needs. However, they understand the need to carry out such activities as providing desktop training for employees and performing periodic computer repairs and upgrades. For these companies, outsourcing remains a cost-effective and controllable expense.
Drew Paras, CEO of Tech Hero, a computer consulting and repair business catering to SMEs, has seen an increase in the demand for IT outsourcing over the last year. “We have seen more interest in outsourcing IT needs, especially among smaller professional firms such as medical practices and CPAs,” he says. “The idea of not being locked in to maintaining a full-time staff or signing a long-term service contract is very attractive, especially given the current economy.”
Paras points out several advantages businesses should consider when deciding whether to outsource their IT needs. Outsourcing gives a business the ability to:
- Improve cost management controls by paying only for those services that are needed.
Reduce expenses associated with maintaining in-house staff, while still enjoying access to IT specialists knowledgeable in their field.
Access IT support 24/7 at a fraction of the cost associated with long-term service contracts.
Secure services and support on an a la carte basis.
Outsourcing is not always the best choice, if an SME has the capacity and budget to perform IT tasks internally. However, if they do not, and outsourcing allows a business to remain viable and competitive while controlling expenses, it may be an option that deserves a closer look.