The Perks and Pitfalls of Email Outsourcing

Updated: May 29, 2008

Issue

For most employees, email is a fast and efficient means for sharing information with co-workers and clients alike. But for IT managers, email is often an unruly beast that gobbles up time and precious IT resources while exposing a company to security risks and legal liabilities. So it's no wonder that an increasing number of enterprises are outsourcing email-management duties to a third-party provider.

Analysis


In fact, Gartner estimates that 80 percent of enterprises with fewer than 300 employees could save money by outsourcing email. Maurene Caplan Grey, a principal analyst at Grey Consulting, agrees. Grey said, "It can be more economical to outsource email, particularly for a small- to medium-sized business [SMB]." Driving the high cost of email management are factors such as messaging hardware, software licenses, migration expenses, upgrades and technical-support staff — a tall order for today's cash-strapped SMBs. What's more, while corporate outsourcing costs range from $10 to $30 per inbox, per month, most organizations pay between $30 and $80 per inbox, per month for basic messaging software, according to SaskTel, a Canadian telecommunications company.

Larger businesses also stand to benefit from outsourcing email, even if it's only to outsource a particular component of email management such as security or archiving . Analyst firm IDC predicts that the market for email archiving will reach more than $1 billion by 2010. And outsourcers currently handle around one-third of all email-archiving tasks.

Another upside to outsourcing corporate email is the guarantee of greater system reliability via an SLA (service-level agreement). After all, Grey pointed out, with an outsourcer, a company lays claim to "a formalized SLA, and there's a real financial penalty if the SLA metrics aren't met, whereas rarely would you have such a formalized SLA with an internal department."

An outsourcer can also offer greater scalability and flexibility. For example, by using an outsourcer, a company can quickly add new inboxes across geographically scattered locations or introduce new services such as VoIP functionality in record time — and at a predictable cost.

But for all of its perks, email outsourcing also comes with its fair share of pitfalls. For starters, informing an IT team of plans to outsource any technology is enough to send some employees into the arms of a competitor in a pink-slip-fear frenzy. For this reason, it's crucial that companies take matters into their own hands by assuring IT managers that their skills will continue to be put to good use. Said Grey, "What smart, C-level people do when outsourcing is they move the engineers that are running the messaging system into another area where they're needed in house. In the end, you're saving money because you're using people that already understand your infrastructure and business culture in other areas of the company."

Outsourcing can also give rise to feelings of neglect, as many companies fear playing second fiddle to an outsourcer's Empathy, adaptability and acting ability are just three critical traits of a top call-center employee.larger and more demanding clients. Fortunately, said Grey, corporate fears of abandonment are more of "a perceived challenge than an actual drawback."

Concerns relating to data protection, however, are perfectly legitimate. Companies must be sure that any corporate data that travels between networks and resides on an outsourcer's servers is safeguarded against security and privacy breaches. For this reason, it's important to find a third-party provider with solid references and a detailed confidentiality policy. In addition, companies should look for an outsourcer that regularly conducts audits of its own data-management processes.

Next Steps

For more information on email providers and security, check out the Comparison Guide: Email Security. You can also ask Focus Experts questions about email security and email outsourcing here.

Featured Research
  • 7 key questions to ask any ERP provider

    Having a fast-growing business is good. Having to overhaul your technology every time you need to scale is not. Upgrading to a more complete Enterprise Resource Planning (ERP) solution can help, but how do you ensure the solution you choose is exactly what you need? To help you with your search, we’ve pulled together 7 key questions every fast-growing business should ask before choosing a cloud-based ERP solution, including: more

  • How Finance Leadership Pays Off

    Oxford Economics recently surveyed 1,500 finance executives and it’s clear that small and midsize companies are growing significantly faster than larger companies. But, there are also big opportunities for finance to increase efficiency, boost financial performance, and work more strategically. Why is that? more

  • Professional Services Audience – Improve Profitability Infographic

    As a Professional Services Organization (PSO), you know the importance of customer satisfaction. In fact, 47% of PSO leaders say managing changing customer expectations is their top challenge. That’s why many firms are engaging smarter project management technology, even before deals are signed, to ensure project profitability. How are these leaders utilizing technology? Find out now. more

  • 9 Tips for a Compelling Video Presentation

    Face-to-face communication is the most effective way to collaborate and bring ideas to life in your business. Because of this, many businesses invest heavily in travel budgets so they can meet in person to create and nurture business opportunities. However, video technology has become more accessible, affordable, and user-friendly over the years. In fact, the enterprise video business market will reach $36.5 billion by 2018. more

  • Business Phone System Buyer's Guide

    Communication has been a focal point in business since inception, but the industry is changing drastically in how people connect to one another and what tools and systems they use to do so. Less than 15 years ago, 90% of people relied on landline phone systems for communication. Today, less than 60% of Americans even have a landline and 40% rely solely on their mobile phone. more