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
  • BI Buzzwords

    Can you speak data? Business Intelligence (BI) is becoming an absolute must-have in order to compete with over 55% of large companies investing in TWO or more BI tools. To further this point, 89% percent of business leaders think Big Data will have an impact on business operations much like the internet has. more

  • The Social Side of Service

    Did you know that 83% of Twitter users who tweeted a complaint said they loved receiving a response from the brand? In order to provide the best possible service to your customers, you MUST provide service on the channels that they are utilizing. Social customer service might seem scary and undefined, but can be much more effective and less expensive than traditional channels. more

  • Video Conferencing

    For many, the mere mention of video conferencing brings about bad memories of conference rooms full of people staring at a screen with dodgy sound, fuzzy images, and broken connections. What if we were to tell you that over the past decade, video conferencing solutions have evolved to where they are affordable to businesses of every size and have evolved beyond just the standard boardroom. Today, 74% of B2C marketers and 94% of B2B marketers use video in their marketing efforts. more

  • EHR Implementation

    More and more medical practices are selecting and implementing electronic health records (EHR) than ever before. In fact, statistics show that the number of practices who have purchased an EHR has doubled in just three years. That being said, many practices fail to prepare for their new EHR and thus do not gain the full benefits that come with implementing a solution. more

  • Selecting the Right EHR for Your Practice

    The purchase and implementation of an electronic health record (EHR) system is no small feat and is a big step for a practice, small or large, to take. Selecting your new EHR is one of the most important decisions that you will make for your practice. more