Outsourcing IT - The Greater Gains

December 2008

Can outsourcing your IT be a good move for your business? Is it simply a way to cut costs or an innovative way to gain business advantage?

Economic pressures call for a different approach to the delivery of IT services.  Business Managers are caught in a dilemma as they weigh up how to balance pressure from the board to cut costs, yet still make appropriate short-term tactical decisions that keep the long-term business strategy going in the right direction.

What you are ultimately looking for is a balance of investment and making the most of what you have to make you more effective.  This means you have to be flexible and actively look for more inventive ways at being clever in the ways you work to give you that competitive advantage.

Cost cutting has traditionally been one of the initial benefits of outsourcing IT, but those who outsource appreciate that there are much greater gains in terms of a higher level of added value and least risk solutions.

IT systems are becoming increasingly complex as technology develops. IT Managers are overburdened with networking services management, server security, databases and application administration.   Recruiting an IT Manager with comprehensive knowledge of every system, piece of equipment and type of software is nigh on impossible.  Therefore utilising the collective knowledge, technical expertise and specialist experience of an outsource IT solutions provider can pay great dividends. 

IT Outsourcing should be a two-way relationship, your supplier should add value to your product or service and have an understanding of your business in order to contribute effectively to the overall strategy. Getting the supplier right can achieve savings while helping the business progress.

High calibre IT solutions providers continually train their professionals, working with the latest industry innovations and methods of best practice. They are best placed to advise on how to get the most out of your existing systems - system under-utilisation is the biggest waste of investment for most organisations - the appropriateness of new applications, technologies or hardware.

Most of us would agree that our work life dependency on IT systems is immeasurable; in fact we take it for granted.  Yet the horror of downtime, and the impact it has upon our businesses, is rarely considered. In the age where technology is utilised to gain business advantage and processes are streamlined for efficiency, often the most important asset a business owns is the data it generates and stores on the system.  Losing access to data, hardware and software can have critical impact on business operations.

Managing that risk with continuous systems monitoring not only minimises downtime impact it can pre-empt it.   Engineers monitor your systems twenty-four hours a day, pro-actively identifying anomalies and deploying rapid response fixes, ensuring your network stays stable and secure.

 Outsourcing should take into account the control of costs.  When negotiating a contract you should look to agree support charges on per month, per user, basis. Systems monitoring and maintenance should also be at fixed cost. This way you maintain control of your budgeting and can increase or decrease your costs in parallel with your workforce fluctuations. 

Outsourcing contracts have changed over the years to encourage innovation; managed services are responsive, with clearly defined service levels.  Service Level Agreements should be appropriate and set reasonable targets for providing services to meet your organisation’s requirements.  Those targets should be documented and your supplier should use software to measure and manage conformance, utilising the data to report to you and improve the service on an ongoing basis. Ensuring visibility of your business IT activities is preserved.

Once IT starts considering business operations in terms of how they deliver services to users they become much more in tune with what users want and there are fewer problems in terms of the business perception of IT. Outsourcing should not be seen as a threat by those affected, but care should be given to managing this positively within the organisation.  Existing IT employees should be encouraged to view this as a potential for career development, integrated into the outsource service company and given more opportunities for personal and technical growth.  There is no loss of existing knowledge, individuals are simply better trained, structured, motivated and managed. For the client, sickness and holiday cover is no longer a problem and any associated training costs are negated.

Outsourcing IT can be a means of creating a higher level of value across all aspects of your business. The ultimate value of outsourcing your IT can be significant and not just in monetary terms.