Main Risks of IT Outsourcing in 2022 and How to Mitigate Them
Due to the lack of in-house resources, outsourcing IT is an inevitable procedure when it comes to many businesses around the globe. IT outsourcing means hiring a third-party IT company to provide your business with application services, networking, and infrastructure to sustain its IT-enabled operations. It ensures cost reduction, subject expertise, and effectiveness of business operations. It is common to see IT outsourcing in Singapore, where hundreds and thousands of businesses run their operations online. As convenient as it may sound, IT outsourcing however comes with certain risk factors as well. Read on to learn about the main risks that IT outsourcing can bring to a business in 2022.
Risks of Outsourcing IT Support in Singapore and How to Overcome Them
Due to the inherent risks connected with IT outsourcing, many business owners are hesitant to utilize these services. However, with the right IT partner on board, all of these risks may be efficiently minimized, allowing organizations to operate seamlessly.
1. Loss of Control
By outsourcing IT services, you are giving control of your business operations to a third party. For example, giving control of your essential corporate functions will raise security concerns. The main risk here is the third party failing to meet your expectations accurately. The worst outcome that you could experience from IT outsourcing is losing total control of the IT-enabled procedures of your own business. Having said that, it must also be mentioned that , the advantages of being free from the stress of managing IT alongside your regular business tasks is a definite benefit you can look forward to with reliable IT outsourcing. A well-reputed IT outsourcing company like NEX CorporateIT, that comes with reliability, integrity, positive client reviews, and years of experience in the industry can help you navigate the complex world of IT with ease.
2. Communication Barriers
IT support service providers often work remotely or offshore, and most of the communication happens via virtual platforms. In such a setting, interaction roadblocks, miscommunication, and scheduling issues commonly occur as you and your service provider do not work on the same premise. The key to minimizing such issues is to plan the operations ahead and to pay constant attention to every move that both parties make. NEX CorporateIT always ensures simple and direct communication. With an effective, strategically geared workflow management, NEX CorporateIT can help you carry out your business procedures seamlessly.
3. Unresponsive Support Team
One of the biggest hassles that can occur during IT outsourcing is having to deal with an unresponsive support team. Generally, your IT outsourcing company is bound to help you around the clock. However, if you hire a poorly-functioning service provider, the chances that you may not receive prompt responses from them are high. This can affect the flow of your business operations, causing delays in troubleshooting and fixing problems. Going for a renowned IT outsourcing company with an active and responsive staff is the best way to avoid this risk.
4. Hidden Costs
Another risk of IT outsourcing is coming across hidden costs. Generally, IT outsourcing companies provide support services as packages. Often, they charge a monthly fee for the basic services and rack up the additional support, software, and consultation charges accordingly. However, there are occasions when your service provider may add hidden charges to the list without your knowledge. Even though it only happens with certain obscure outsourcing companies, to maintain transparency, it is always good to carefully read the agreement or the contract before signing, regardless of which company you wish to work with. It is always a good practice to seek references and discuss additional charges that may occur throughout the outsourcing procedure to avoid experiencing hidden charges.
5. Lack of Security
Providing businesses with cyber security is part of IT outsourcing. Ironically, this has taken a different turn at present. Hiring the wrong IT service provider has a high chance of causing data breaches. This can happen to organizations that handle highly sensitive information such as financial institutions. Furthermore, if the service provider is not equipped with the latest technologies and security strategies, your organization’s data will be vulnerable to the outside. However, to provide businesses like financial institutions with additional security, the Monetary Authority of Singapore has introduced Technology Risk Management Guidelines (MAS TRM Guidelines) that regulate IT outsourcing. The key to receiving higher security is to choose an IT outsourcing company that provides MAS-regulated services like NEX CorporateIT.
How to Mitigate Risks and Outsource IT Services Safely
Adhering to the guidelines introduced by the government is the key to avoiding risks in IT outsourcing. Apart from TRM Guidelines, the Monetary Authority of Singapore has introduced the Outsourcing Guidelines to further safeguard business organizations such as financial institutions when outsourcing IT. According to the Outsourcing Guidelines of 2016, businesses can mitigate the risks of IT outsourcing by adhering to the following:
- Identifying the role of IT outsourcing with regard to the objectives of the organization.
- Conducting thorough due diligence on the outsourcing arrangement’s structure, scope, and complexity.
- Evaluating the service provider’s capacity to deliver the outsourced service with the utmost care and adhering to regulatory requirements as required by the institution.
- Evaluating whether the institution has sufficient internal knowledge and resources to minimize the risks highlighted and how the outsourcing relationship would affect the institution’s overall risk profile.
Looking for a Reliable IT Services Provider?
Even though outsourcing IT, giving a third-party company access to various data and information about your business seems to be a risky move, the benefits that come alongside make it worth consideration. The key to making the most out of your business with the support of information technology, while securing your company’s data is to hire a trustworthy IT service provider.
When providing IT solutions, NEX CorporateIT always fully adheres to the Monetary Authority of Singapore’s (MAS) TRM Guidelines and Outsourcing Guidelines. We also go through external audits every year to ensure that the goals of security monitoring are met and that any vulnerabilities are promptly addressed with rectifications or mediation processes. Make contact with NEX CorporateIT right now to get all of your company’s IT needs properly met.
