Are you considering information technology outsourcing?
Originally published in March 2020 for Cloud100.co
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5 Things to consider when information technology outsourcing
Every growing business will get to a stage where they either need to recruit more IT staff. Or they need to buy more services to help them develop, grow and support the technology to provide valuable outcomes for the business. Another option is to partner with a 3rd party and outsource your IT. Deciding which route to take can be tricky. First we need to understand what is meant by “IT outsourcing”
Gartner’s definition of Information Technology Outsourcing is as follows:
“Information Technology outsourcing is the use of external service providers to effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes.
Outsourcing, which also includes utility services, software as a service and cloud-enabled outsourcing, helps clients to develop the right sourcing strategies and vision, select the right IT service providers, structure the best possible contracts, and govern deals for sustainable win-win relationships with external providers.
Outsourcing can enable enterprises to reduce costs, accelerate time to market, and take advantage of external expertise, assets and/or intellectual property.”
The decision to outsource your IT can be a complicated one and there are a number of key factors to take into consideration. Many businesses outsource for all kinds of different reasons some of these reasons are valid and some can lead to disappointment. It’s vitally important to consider all the risks and pitfalls before you go ahead. Here are a few of the things you need to consider.
Think Holistically
Clearly define your strategy and the objectives for your entire business. Outsourcing takes many forms and these days very few companies rely entirely on internal resources only. Review what technologies you currently use and how they are supported across your business. Some of these may already be outsourced. Whether you opt for outsourcing your technology or staff or prefer to do it inhouse, you will have a much better understanding of the correct option when you take all the functions and departments into consideration rather then just focus on IT alone. Failure to look at this holistically can lead to unnecessary complexities and a “mash up” of multiple outsourced partners and internal services.
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Consider the value versus the cost
Building an IT Team to deliver and support your IT from scratch can be an expensive business, make sure you consider the cost of recruiting staff, employing managers and any training requirements, don’t forget to include any hidden costs such as time spent in the HR and Admin functions.
If you already have a complex internal IT infrastructure and/or Technology stack, supported by an internal IT team and you’re looking to outsource this then you must consider the additional costs and the associated risks. Often internal staff will have a gained a great deal of valuable knowledge of the environment and business processes which are not always easily passed on to a 3rd party.
Avoid reinventing the wheel
Do you have a complex requirement and currently rely on your non-technical staff to maintain or support this whilst keeping on top of their “day jobs”? Try to avoid ripping everything out and replacing it with something else. Instead see how you can re-utilise existing services and skills and build on your outsource requirements from there. Outsourcing your IT Support can however be a quick way to “buy in” the expertise you need and reduce the stress on your existing teams. This in turn will allow staff more time to focus on one specific role and undoubtedly improve their morale.
Keep it (Information Technology outsourcing) Simple
One of the challenges of outsourcing is deciding who to partner with. Many outsourcing relationships break down because the 3rd party is not able to grow with your business or lacks the correct expertise to really meet your requirements. be prepared to kiss a few frogs before you meet your prince. The answer is to keep it simple, start small and grow from there and avoid putting all your eggs in one basket too quickly. This will make it easier to change partners before you become too deeply embedded with the wrong one.
Don’t lose touch
Once you’ve selected your outsource partner and undertaken a full due diligence with them, make sure you keep up a close relationship. Its very easy for businesses to drift apart and the partner you rely on for so much of your technology is not kept in step with you. You will need to ensure you have a Supplier Manager or IT Business Partner Manager to collaborate with all your suppliers, partners and internal departments. Their job will be to ensure that you, your partners and internal teams all understand the vision and are working towards the same objectives of the business. Hold regular service reviews and have a strategy to improve any service which is not performing well.
