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In today’s digital world most small businesses are reliant to some extent on IT. And although it would be wonderful to have someone in-house who could fix everyone’s IT problems in-person and straight away, the reality is such a luxury is beyond the budget of all but the largest organisations. 

Alternatively, most small companies choose to outsource their IT requirements to save time and money without compromising the quality of the service. 

To help you decide to outsource your IT services, we have created a brief guide.

What types of IT outsourcing are available?

Your options regarding outsourcing include:

  • Classic outsourcing – you engage a company on a retainer basis to manage your day-to-day and one-off IT tasks and projects
  • Project-based outsourcing – the IT component of a specific project is outsourced with the provider taking care of all the software development, quality assurance and project management
  • Outstaffing – your business buys the time of employees who work for an IT outsourcing company
  • Opening an offshore company – your organisation opens a branch abroad and hires local staff

What are the benefits and risks of outsourcing IT services? 

Benefits include:

  • Although you may have to pay a higher hourly rate for outsourced IT services, you will not need to pay for pensions, employee insurance, or deal with paternity/maternity leave and pay, sick pay, or any other employee-related statutory rights. In the long run this can help to reduce costs
  • You can access best-in-class talent from multiple providers which can help give you a competitive advantage and also speed up problem solving
  • Your employees can focus on other areas of the business
  • If the relationship between you and the IT service provider becomes inadequate or difficult you can replace the supplier once the contractual period ends
  • You can work with companies in the UK and abroad

Risks include:

  • You will lose some control of the projects or services you outsource - this can be particularly difficult if you rely heavily on that service to make your business operate

  • Like any form of outsourcing, you will only have a contractually agreed amount of time on the project or service
  • There can also be hidden costs - that’s why it is good to have clear terms and payment schedules in place with contracts such as an SLA or SOW
  • There can be security risks to letting an external supplier use your systems, they may also not follow the correct security protocols that your organisation uses to remain protected

  • When outsourcing IT services there is less room for real change to infrastructure and systems to take place, this causes a loss in innovation amongst your in-house team
  • Depending on the terms of the project you outsource you may not be able to retain any intellectual property rights
  • Working with multiple outsourced services can lead to things becoming lost in translation or projects not progressing

What IT services can be outsourced?

The most popular IT services outsourced to third parties include general support (finance, administration, etc), disaster recovery, data processing, and e-commerce web-design functions. 

Get legal assistance from LawBite

Outsourcing your IT support can save you time and money plus provide your small business access to the most talented IT professionals in the UK and abroad.

LawBite has years of experience helping startups and small businesses achieve their commercial ambitions. To find out how we can support you regarding outsourcing your IT services, book a free 15-minute consultation with one of our expert lawyers today.


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In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.