While outsourcing can provide significant benefits in terms of productivity, cost-effectiveness, safety, and security, it can also be difficult to measure its return on investment (ROI). Companies need to accurately estimate the value of their outsourcing partnerships to make informed decisions and optimize their outsourcing strategies.
In this blog post, we’ll provide practical tips and insights on how to measure your IT outsourcing ROI.
What is the Outsourcing ROI and Why is it Important?
The outsourcing ROI is the calculation and evaluation of the financial return on investment that a company achieves by outsourcing certain processes and functions to an external service provider. It includes comparing the costs associated with outsourcing to the benefits it provides. This helps determine the effectiveness of the outsourcing strategy and its impact on the financial performance of the business.
Measuring the outsourcing ROI is crucial to remaining competitive in today’s fast-paced and ever-changing business environment. Also, identifying the areas where outsourcing can provide the most significant ROI enables organizations to make informed decisions about prioritizing certain processes and functions and allocating resources more effectively.
6 Ways To Measure Your IT Outsourcing ROI
- Analyze Efficiency and Productivity
If your business does everything in-house, your costs will probably be higher than an outsourced IT service. Also, the responsibility of maintaining highly trained staff is on you.
In specialized areas like IT support, you must ensure your team is up to date on new technology, trends, and certifications. The right IT support outsourcing company can help you keep up with industry standards without the worry about maintaining a sufficient IT team in-house.
In addition, IT outsourcing companies can reduce downtime and expenses. Unplanned deadlock, whether it affects an individual employee or an entire organization, can lead to a lot of lost productivity. You should rate if the outsourcing company eliminated or significantly reduced downtime.
Also, you should measure productivity gains, such as improved service quality and faster turnaround times, to help you understand the impact of outsourcing on overall business performance and how it leads to a positive IT outsourcing ROI.
- Is There More Time to Focus on Core Business?
Outsourcing your IT support to an external provider frees up internal resources, as it would allow your employees to strictly focus on tasks that are of value to them and their performance, without any need to take care of technical difficulties they might run into.
Further, outsourcing your support for a prolonged time will grow into a fully specialized service, which would allow for custom procedures and processes to be formed, in time gaining sufficient experience to allow for a rapid response in case of any issues.
If employees assign their time and talent back to specific duties and projects they were hired to do, it indicates a good IT outsourcing ROI. Also, it can be noticed in the quality of work of these employees.
When your employees are focused on their tasks, you can monitor the business and focus on moving the company forward without distractions.
- Is your Labor Cost Reduced?
Outsourcing IT support should reduce your labor costs. Hiring full-time IT staff can be expensive, and they come with added expenses like training, insurance, and paid time off.
Another IT outsourcing ROI is avoiding unnecessary labor costs for full-time employees. IT support staff should monitor your server, maintain databases, and assist with technical problems. But if there are no tasks to attend to, you are paying them just for their presence.
IT outsourcing provides you with highly trained professionals, 24-hour support, and the latest technology. You can measure your ROI by comparing the cost of having full-time employees to paying an outsourcing provider who is always available to satisfy your company’s needs.
- Evaluate Customer Satisfaction
Outsourcing can also have a big impact on customer satisfaction levels. It can improve your ability to meet customer needs and respond to their inquiries quickly and effectively.
Furthermore, IT service providers may have specialized expertise or tools that can enhance the quality of services provided to customers. Overall, IT outsourcing can result in increased customer satisfaction and loyalty.
You can conduct surveys or gather feedback from customers to measure their satisfaction with the outsourced process and how it impacts their experience with your company.
- Is there an enhancement in your company’s data security?
Securing your network is an important feature of outsourcing IT support. Your IT team must be up to date with the newest and best tools to prevent security breaches.
Your outsourcing partner should offer scheduled back-ups, cyber security protocols, and in-house training, which can contribute to the realization of a positive IT Outsourcing ROI.
The goal of scheduled back-ups is to provide you with the most current data regarding security breaches. Cyber security protocols reduce chaos in case your company faces a cyber-attack. Your IT support team will be able to come in and sort things out.
In-house staff training includes teaching employees how to set up secure passwords and training HR staff how to secure files. This increases the cost-effectiveness of your IT support outsourcing.
- Determine Intangible Benefits
It’s essential to recognize that some benefits of outsourcing may not be easily quantifiable and are not directly tied to cost saving. Therefore, you should evaluate intangible benefits such as enhanced flexibility, agility, and innovation that outsourcing brought to your business.
These factors can have a major impact on your IT outsourcing ROI and must be considered when estimating the overall value of outsourcing.
In conclusion, measuring the IT outsourcing ROI is crucial for determining the success of your investment. By defining clear goals and tracking performance metrics, you can accurately estimate ROI and make informed decisions.
Choosing the right outsourcing partner and managing the relationship effectively are key factors in achieving a positive ROI. If you are curious about our services or you need more expert advice, feel free to contact us!
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