IT outsourcing risks and solutions for them

While dealing with modern fast-paced business challenges, many companies decide to go for IT outsourcing to gain instant access to highly-skilled software engineers and cloud architects. However, many businesses are still reluctant to follow this road due to the various risks of IT outsourcing. We list the most important IT outsourcing risks and solutions for them, so you can make an informed decision.

4 main risks of working with an IT outsourcing company:

  • Loss of control over the project
  • Uncertain project outcomes
  • Exceeding the initial budget
  • IP loss and disclosure of data

Here is why this happens and how to solve these quandaries.

Loss of control over the project

Hiring a dedicated team to work on your project means giving the reins to third-party managers and losing direct control of the process. This can be a challenge to diligent managers, who are used to keeping an eye on every facet of their business operations.

Solution: establish a transparent roadmap and workflow before the project start. Define all the procedures, outline the requirements of outsourcing IT workloads, the ways to monitor the progress and to adjust the requirements if the need arises — and you will effectively have full control over the IT outsourcing project.

Uncertain project outcomes

There is no guarantee that the company you choose will actually be able to deliver the outcomes you need, in time and under budget. No matter their expertise and no matter the level of detail of your Scope of Work agreement and project specifications — things can go wrong at any moment with software development. Thus said, IT outsourcing for a cloud computing project is still much less risky than trying to hire a team in-house to do that.

Solution: Ask for references, and don’t believe all the previous projects of this IT outsourcing company were covered by NDA. A good Managed Services Provider will be able to connect you to at least 3-5 satisfied customers. These businesses will be able to tell you about the attitude, competence and project management style of the IT outsourcing contractor, as well as showcase the results of their work.

Unforeseen costs

There are multiple situations when the outsourcing IT team can exceed the planned project time frames or budget. Unforeseen upgrades for your systems that are blocking the further advance of the project, system crashes that result in working long hours to restore the software ecosystem — these and other factors can contribute to the need of pay more than expected. One cannot plan for everything, so the key here is to respond correctly to such issues.

Solution: SLA helps lay out a procedure for dealing with possible quandaries before they actually occur. You cannot foresee for all and any circumstances, but SLA helps provide a stable ground to deal with issues as they arise and a reliable tool to evaluate what must be paid — and what expenses are covered by the contract.

Information disclosure and IP theft

Although this is considered bad practice and is not well-spread, some lower-standing IT outsourcing providers can engage in IP theft and disclose essential project information to your competitors. While contacting a reputable Managed Services Provider like excludes such a possibility, signing an NDA is a wise choice.

Solution: Sign an NDA to enforce legal consequences to any potential IP misuse or theft. Working out a legal procedure and terms of persecution should the IT outsourcing company disclose your data helps keep the things in check. To say more, good outsourcing IT companies offer to sign an NDA themselves.

Conclusion: all IT outsourcing risks can be mitigated

As we demonstrated above, all IT outsourcing risks can be easily mitigated, so you can reap the benefits of outsourcing IT projects to a trustworthy partner and knowing they will be delivered on time while concentrating on growing your business.