As the owner of a small company, you have probably entertained the thought of outsourcing some aspect of your business. The benefits of outsourcing seem obvious, touted by experts across numerous industries as the answer to cutting costs for business functions ranging from information technology to accounting, marketing and human resources; it seems possible that you could run an entire company without ever hiring a single employee.

In this article, we'll discuss the 3 R's of outsourcing: Reasons, Risks and Rewards, specifically as they relate to information technology (IT). And, as a bonus, we'll provide some tips to help you manage successful relationships with your IT service providers (whether they are full-time staff, or outsourced).

The Reasons

According to the Outsourcing Institute's Outsourcing Index 2000, there are many reasons why companies outsource. Here are some of the top reasons: 

            1 Reduce and control operating costs. 
            2.Improve company focus. 
            3.Gain access to exceptional capabilities. 
            4.Free internal resources for other purposes. 
             5.Resources are not available internally. 
             6.Maximize restructuring benefits. 
             7.Function difficult to manage or out of control. 
              8.Make capital funds available.

The Risks

Anytime you give someone else responsibility for an aspect of your business, whether a full-time new hire or an outside vendor, there is risk involved. Did I hire the right person/company to do the job? Will they do what they are supposed to do? How will they "fit" with existing employees or departments?
"The Pros and Cons of IT Outsourcing," business owners who consider outsourcing IT functions need to be aware of the following risks: 
   1.Some IT functions are not easily outsourced. 
   2.Control may be lost. 
   3.Employee morale may be affected.
The Rewards
Still not sure whether to outsource or not? There are many rewards you can expect when you outsource your company's IT functions as well: 
  1.Access to the latest and greatest in technology. 
   2.Cost savings. 
   3.High quality of staff. 
    4.Job security and burnout reduction for regular employees.