Fear of surrendering control is probably the main factor holding many IT directors back from realizing the benefits of outsourcing IT services. But if you can find an IT services supplier who will work with you in a genuine partnership, understanding the specific needs of your business, it soon becomes clear that this fear is misplaced. It is perfectly possible to retain your strategic power while outsourcing the fundamental and mundane elements of your IT service and support. By opening the door to outsourcing some niche services or even your entire application or database management infrastructure, you can generate a host of business benefits.
The top 10 benefits of outsourcing
- Reduced service and support costs within a managed and predictable budget
- Better quality of service, fewer IT failures and less downtime thanks to well-defined service level agreements
- Access to the latest applications without high up-front license costs
- Access to accredited engineers, skills and technical expertise without having to train your own staff
- Reduced risk of employees leaving and taking their knowledge with them
- Round-the-clock access to a help desk primed to resolve problems remotely and rapidly
- Compliance with the latest regulations
- Guaranteed data security at remote, hosted data centers
- Real accountability via contracted commitments from a third party supplier partner that wants to keep your business rather than reliance on an in-house group that is hard to pin down
- Remove high IT staff costs from your balance sheet and shift to an opex budget
For some time, there have been signs that IT directors in smaller enterprises are increasingly receptive to these benefits and are even embracing them with greater agility than their global counterparts. A survey from Computer Economics suggested that 27% of businesses now outsource applications management, while 21% outsource database management.
According to Information Week, as this level of outsourcing gains credibility the benefits quickly accumulate in terms of greater flexibility (particularly for companies that are growing rapidly); access to cost-effective expertise, techniques and programs; access to third-party resources such as the help desk, which liberates IT staff to focus on more productive business-focused activities; and the wider savings achieved by not having to invest in infrastructure and licenses.
Take email services as one example: Gartner estimates that outsourcing just this one application could save businesses with fewer than 300 employees a significant amount because an outsourcing partner has the dedicated infrastructure to manage it at a much lower cost.
Five reasons to outsource
Here are five good reasons why you should think about outsourcing your IT services:
1. You could save significant staff costs.
Not just on the recruitment and hiring front. Skilled people with strong application-based credentials don’t come cheap and have long-term costs. Why spend time and money training somebody to support a core business application, only to see them poached by another employer and taking their expensively-acquired skills with them? Or send them to costly training to keep their skills current? And why not liberate your in-house IT staff to focus on projects that add value to the business rather than spending their precious time on firefighting duty?
2. An outsourced call center/help desk frees your resources.
Providing round-the-clock support for your users in-house is expensive. Depending on the size of your business, you might need a dedicated facility that is operated by key IT support staff and is a significant cost center in terms of facilities management overheads. Even in a smaller IT operation, somebody—it might even be you—has to be on call outside office hours to provide IT support for an increasingly mobile workforce. Thanks to greater economies of scale, a dynamic IT services partner should provide a superior help desk at a greatly reduced cost.
3. You can save money all around – with the right outsourcing strategy and partner.
A good IT services partner will work with you to identify the pressure points that make sense for you to outsource. These can vary tremendously from one business to another. Toolbox.com points out that cost savings vary with the number of employees who need support and to what degree, the number of devices involved, the types of applications that you use, the ratio of employees using office space to remote workers, and even your geographic location when it comes to the price of on-site support. These are complex calculations that deserve patient analysis.
4. Your business will be more flexible in its use and consumption of IT services.
Infrastructure is expensive. Why invest in servers, complex networks and other hardware just to deliver vital but everyday applications to your users when you can have those applications managed and distributed as a service direct to the desktop without the expense of hardware maintenance? Because your applications are being managed and hosted by a third party, they can be scaled up or down to meet fluctuating demand, and your costs will be more tightly controlled as a result.
5. Peace of mind.
Why let worries about more complex issues such as data security or disaster recovery keep you awake at night when they can be managed and supported by a third party who has all the necessary expertise and infrastructure to meet your security and business continuity requirements? Yes, they are important, but by choosing the right partner to provide relevant support services, you are prioritizing them rather than allowing them to become distractions that need constant attention from your in-house IT team.
Negotiation is the key to getting your relationship with your IT services supplier off to the best start and making sure you realize the business benefits that you expect. And it starts long before the contract is signed. It should be more profitable if you decide what you want from your contract before you choose your supplier.
Select an IT service partner who demonstrates they understand your business and clearly articulates the value they can bring to your operations. By combining and matching your goals with an IT service partner who has the vision to match them and deliver the latest service desk technologies to provide you with complete service performance visibility, including measurable indications of performance quality, you’ll soon become part of the rising tide of SMEs that are living proof of the benefits of outsourcing.
- Outsourcing IT services does not mean all or nothing.
- You can deliver genuine benefits to your business by outsourcing IT services if you negotiate service levels that are customized to your company.
- Fear of surrendering control is the main factor holding many IT directors back from outsourcing IT services—but you can keep control if you select the right partner.
Feel free to share your thoughts.
All of small companies don’t need an experienced IT professional, and they can’t afford their salary.
So, the obvious solution is to hire an external company or freelancer to carry their projects and finish the tasks.
I agree that out-sourcing has many benefits but in my opinion, company out-sourcing particular activity, gets service for that particular activity from the company. Whereas in-house team can take care of other activities too. They have concern for the functioning of organization.
There are some things that may be outsourced but I am struggling to think of many.
call centres (in UK) [are moving back to UK because] most of outsourced (abroad) call centres’ employees can’t understand many English accents (and it is often impossible to understand call centre employee’s accent).
IT services – most companies which attempted it around year 2000 are not even trying to do it now, though at the same time they are not advertising their knowledge because it cost them a lot of money to find the inefficiencies of this model.
Production – I have heard about a new start-up (in UK) trying to save money and ordering a first batch in China for the launch of their product. I don’t know whose fault it was but the batch was completely unusable, so all the money were just thrown away AND they had no product to launch.
Was my comment deleted because it goes against your view?
Realistically outsourcing is not for all, AT&T outsourced their transportation and installation division in the 1980’s to make them lean and more profitable, however all this did was leave them with a huge problem, lack of control on their deliveries and unable to provide adequate installation times to their customers. They went form #1 to a distant #3 in the global telecommunication market. On the other hand a company such as ours, Magic seasoning Blends, cannot afford to outsource our mainframe data files and hardware/software applications due to the extreme nature of the data. Would Coke give out their formula’s for their beverages ? The answer is No! “Proprietary information cannot be hosted off site” that is what Chef Paul says and that is the law here. We will not send our formulas or recipe’s into the “cloud” I T is not a revenue generating division but can be a cost efficient department with the correct hardware and software applications. There is no need to go overboard for the newest and latest release especially if the cost doesn’t outweigh the gain. It is commonly known that for every upgrade dollar spent you should receive a $3.70 return on investment. If the return is not their then the expense is not warranted. Common sense is a real factor in the choice to outsource and upgrade, I suggest you make intelligent and rational choices before impulsive ones.