South Africa has a shortage of IT skills, which makes resources difficult to find and to retain in-house and many local businesses are on the smaller end of the size scale, which means while IT services are key, they do not amount to full-time jobs, explains Raeford Liebenberg at Silver Moon IT.
The debate as to whether to insource or outsource when it comes to IT is an ongoing one, and each area has its pros and cons. Businesses need to weigh up the perceived risks along with the benefits to decide what works for them, but in the South African climate in particular, there are more benefits than disadvantages.
Not only does outsourcing provide cost-effective access to a broad pool of skills and experience that can be difficult to source as an in-house resource, but it also brings with it an element of enhanced competitiveness that can help to propel businesses forward during challenging times.
The discussion of whether to outsource or insource typically centres around the elements of risk and cost. There is always debate about whether it is cheaper to retain skills in-house or to outsource them, but boiling this down to a pure Rand value can be hazardous, as the true cost of a service is not only related to the money that is paid for it.
IT services have become critical to business, so the cost of getting them wrong will far outweigh the expense of procuring them.
When it comes to outsourcing there may be concerns over loss of control, particularly when it comes to quality and timing of deliverables, as well as confidentiality and security risks around sensitive data. There may also be communication challenges around using external providers, especially if they speak a different language or are located in another time zone, which can affect outcomes.
In today’s world, there is also a growing risk from insider threat, which outsourcing effectively removes – the service provider has a pool of resources delivering a service, and not a single person in a role, which reduces the likelihood of this type of threat. In addition, outsourced service providers will have documented and controlled processes, which enhance business continuity and efficiencies.
South Africa has an undeniable shortage of many core IT skills, which makes resources difficult firstly to find and secondly to retain in-house. Added to this, many local businesses are on the smaller end of the size scale, which means that, while IT services are key, they do not amount to full-time jobs for each role.
The result is often that an IT employee will end up wearing many hats, becoming a generalist over many roles that require specialist skills. There is also a significant risk here for businesses, since if that singular resource moves on to a new role, business continuity can be severely affected.
IT outsourcing has become an effective and cost-beneficial model for addressing the skills challenge. Not only do businesses have access to a broad pool of specialised skills, but they pay only for the services they need when they need them. This is because the service is linked to a Service Level Agreement, SLA which guarantees levels, and IT is not tied to a single person, which improves business continuity.
Service providers will also ensure processes are documented so that tasks can be seamlessly handled by members of a team, and SLAs are not affected by leave or illness. Since delivering the service is also the core business of an outsourced provider, they will also ensure they are up to date with skills, enhancing their service delivery.
On the surface, IT outsourcing can appear to be more expensive than hiring an internal resource. However, the benefit of IT outsourcing goes beyond the pure cost of the service – the improved operational efficiencies that result from using an experienced service provider translate to improvements in multiple areas.
There are also elements like human resources, payroll, sick leave, holidays and more that should be considered, not to mention the detrimental effect on a business if their internal resource looks after a critical function and falls ill or goes on holiday.
Service providers not only deliver a service designed to keep businesses operating at a high level, but they also offer the benefits of a team of resources that are able to leverage knowledge and experience from outside the business.
Since they work in different verticals and have broad experience, they can often offer a different perspective on problems and provide innovative solutions that can boost business efficiency in new ways. From beneficial insights to new concepts, reduced development cycles to process efficiency, IT outsourcing can offer significant value beyond pure cost or access to specialised skills.
The decision of whether to insource or outsource IT services is a complex one, with considerations of risk and cost at the forefront. However, in the South African business landscape, the advantages of IT outsourcing significantly outweigh the disadvantages.
South African businesses grappling with a shortage of core IT skills can find relief in outsourcing, as it provides specialised skills, flexible services, and eliminates the reliance on a single employee. Beyond the surface cost, the value of IT outsourcing extends to operational efficiencies, innovative problem-solving, and a broader perspective on business challenges.
Ultimately, the decision should be based on a thorough evaluation of the unique needs and goals of each business, but the advantages of IT outsourcing in South Africa are compelling.
Pros and cons of IT outsourcing
- The decision of whether to insource or outsource IT services is a complex one, with considerations of risk and cost.
- On the surface, IT outsourcing can appear to be more expensive than hiring an internal resource.
- Outsourcing provides cost-effective access to a broad pool of skills and experience that can be difficult to source as an in-house resource.
- It also brings with it an element of competitiveness that can help to propel businesses forward during challenging times.
- The discussion of whether to outsource or insource typically centres around the elements of risk and cost.
- Boiling this down to pure Rand value can be hazardous, as the true cost of a service is not only related to the money that is paid for it.
- The service provider has a pool of resources delivering a service, and not a single person in a role.
- Outsourced service providers will have documented processes, which enhance business continuity and efficiencies.
- Service are linked to a Service Level Agreement which guarantees levels, and IT is not tied to a single person.
- Service providers offer benefits of a team of resources that are able to leverage knowledge and experience from outside the business.
- They work in different verticals and have broad experience, and can offer a different perspective on problems.
