Outsourcing your IT Infrastructure: The Top Three Myths Debunked
Many companies still believe that they are ‘too small’ to consider outsourcing their IT infrastructure – so let’s get that myth out of the way first of all. Infrastructure outsourcing is not just for large companies. In fact, the provision and management of IT infrastructure can help small-to-medium sized enterprises (SMEs) reduce costs, gain greater control and increase the flexibility of their IT operations.
All of these factors lead us straight to myth number one: the cost benefits of outsourcing are only attainable for large companies. It’s easy to see where this particular myth comes from: details about the latest multi-million pound IT contracts are often covered by the media, where as smaller deals typically are not.
However, if you’re an established SME company with between one and a few hundred employees, outsourcing actually makes a lot of sense – either with the provision of the infrastructure itself and/or the management of it. Cloud computing, in particular, is changing the landscape of infrastructure provision. Instead of having to purchase, set-up and maintain hardware and software in house, the cloud model will allow you to access your IT infrastructure (and/or software) as a service. As a result, upfront costs can be reduced significantly, and you’ll also benefit from the provider’s continual investment in improving/upgrading the infrastructure.
Likewise, you don’t need to have a large IT department in order to reap the benefits of outsourcing the management side of your infrastructure either. We’ve worked with a high-growth SME in the property management and investment sector, which – after outsourcing the management of its infrastructure – reduced its IT head count by 60%. Not only that, but the fixed-price managed service was 57% cheaper than what the company had been spending on staff.
Myth number two amongst SMEs is that outsourcing will lead to a loss of control, since many of the services that used to be performed in-house will now be externalised. Any concern here is really unwarranted: when working with an outsourcer, the ownership is still yours. The main difference is that you can now focus on managing the supplier relationship and performance, instead of being burdened by the day-to-day minutiae involved with running all of these operations yourself.
A greater sense of control can also be gained through a regular review and reporting process (as well as a clear issue escalation process) to make sure that the key business objectives and service performance levels are being met. It’s advised to set a monthly performance/operational review, for example, as well as a bi-annual contractual review and an annual strategic review to ensure that your suppliers are aware of any changes in strategy, and also to cement the relationship between both companies.
Also, it’s worth remembering that outsourcing is not an ‘all or nothing’ arrangement, and we actually recommend that you retain a small number IT staff in house, such as those responsible for end user support. These support staff can give immediate response to issues at the user level, offering the direct interaction which is important to managing internal satisfaction.
Myth number three claims that outsourcing equates to inflexibility, since many SMEs still believe that outsourcing will tie them to a fixed contract with a fixed level of services, thereby leading to less flexibility if (and when) the company’s requirements change.
The fact is the outsourcers’ business is designed to scale up and down and provide a wide range of services to multiple clients. After all, what is your back-office operation is their front office and competitive edge. Experienced outsourcing providers will not only have the economy of scale to offer you cost-effective solutions but also can increase or reduce the service level depend on your business requirement. This is not usually achievable immediately or easily when you have an IT function with fixed headcount. Moreover, the outsourcers will have an extended talent pool or partner network for some specific or niche services you may require.
Simply consider the amount of investment that you’d need to put in up front – and the time it would take to achieve a return on your investment – if you set up and manage your own IT infrastructure in house. It could often be years. And during this period of time, there are still on-going maintenance and support costs and efforts involved. In comparison, by outsourcing the IT infrastructure, you can weigh out these costs over time, and therefore make necessary changes much more easily.
Infrastructure outsourcing is not just for large companies. Our experiences have shown that it has successfully helped many SMEs to reduce costs, gain greater control and increase the flexibility of their IT operation. Through working with a trusted technology partner, you can achieve your core business objectives through an effective and efficient IT function.