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Is IT Outsourcing Right for My Business?

If all outsourcing decisions were as easy as printing business cards, this quandary wouldn’t exist. But because IT outsourcing is a very complex and comprehensive initiative that can affect all aspects of business operations, it has to be approached methodically and with a tremendous amount of organizational awareness and introspection.

The reasons for outsourcing are not always just financial:

  • Are you looking to solve tactical issues like projects with short-term results, immediate cost reductions or staff augmentation?
  • Do you want to free up your me for strategic initiatives?
  • Do you want to improve your service-level metrics?
  • Is your leadership frustrated with current IT capabilities?

Answers to these questions will help align IT projects with business priorities.

Cost Considerations

IT managers must know the costs associated with their current IT operation and the state of its efficiency and effectiveness. Other expenses to consider include hardware refreshes, a disaster recovery plan and compliance requirements.

 

Examine if these costs can be reduced or eliminated by working with a partner. When it comes to selecting a service provider, determine what criteria matters most to your organization:

  • Does the provider fit within cost objectives?
  • Do you want your service provider to be onshore, offshore or both?
  • Does your partner have specific experience in an application or your particular industry?

 

Another consideration is the type of delivery model your service provider will use. If you operate within a time and materials model, you will pay for resource time as it is incurred. Guaranteed service delivery levels are included. You have substantial flexibility in managing your projects but less control over spending.

 

With Service Level Agreement (SLA) models, you pay a defined fee for a defined service level. Your costs are fixed and your results are predictable. The provider manages your environment on an agreed upon service level rather than the amount of time it takes to complete tasks. Most IT partners require a contract term for such an arrangement.

Service Models

Many service models exist for companies to deploy, although they may vary slightly between providers.

  • Remove Managed Services. Hardware and software continue to be located on your premises and the partner monitors and controls the devices from their location. The most common services deployed in this model include 24/7 support, infrastructure management, security mangement and operating system administration.
  • Infrastructure Hosting. A turnkey IT solution on y our provider's infrastructure or relocating your infrastructure to their data center. Typical services include 24/7 support, infrastructure management, security management, operating system administration and disaster recovery. You get the advantage of proven ITIL best practices, world-class technology and compliance experience.
  • Application Managed Services. This service can be added to remote managed services or infrastructure hosting. This involves managed projects through your application layer. Projects can range from Active Directory, Terminal Services and Microsoft Exchange to more complex applications like ERP systems, business intelligence and data warehouses.
  • Full Managed Services. A partner runs all your organization's IT functions. IT leadership focuses on developing IT strategies based on the business' objectvices. The IT strategy is then executed by your strategic partner. The partner also handles day-to-day aspects of IT user support.

In Summary...

There's no right way to manage your IT infrastructure. If you first identify the key issues and accurately determine the cost of those areas within your business, that will help you understand the costs and benefits of working with an IT services partner. Next, look at the management models available and compare the strengths and weaknesses of each, paying close attention to cost impact and your strategic business needs. Once these issues are clear, making the decision becomes much easier.
6 Common Challenges Driving IT Outsourcing
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6 Challenges Driving IT Outsourcing

When it comes to deciding what technology expertise to develop and staff internally and which can be trusted to a managed service provider, however, there are no one-size-fits-all answers.

 

Some of the top IT challenges that affect outsourcing strategies include:

Balancing In-house Resources with Outsourcing

To gain synergies and reduce costs, many providers are bundling packages of services together, sometimes pushing enterprises to outsource more than they wish in order to get a better deal. Rather than take an all or nothing approach to outsourcing, many enterprises are going the hybrid IT route, keeping mission-critical application in-house, but outsourcing those that need to leverage the scalability, expertise or cost-efficiencies that managed service offers. The best arrangements foster both efficiency and innovation for both parties.

The Effect on Information Security

Some technology areas, such as information security, are too complex and fraught with risk for IT to manage alone, but on the other hand, the sensitive nature of security means it's hard to trust the responsibility of outside sources. In the Deloitte survey, 23% of respondents indicated that cyber risks affect outsourcing decision, but shows that the majority were adjusting their approach to view outsourcing as part of the solution, not the problem. Many midsize enterprises consider security-as-a-service outsourcing as a way to gain access to the latest technology and expertise while reducing their exposure.

The Demands of Disaster Recovery

Disaster recovery is another demanding area ripe for outsourcing. Managed business continuity and disaster recovery services are built to provide cost-effective, on-demand availability and scalability few in-house IT departments can match. The Computer Economics IT Outsourcing Statistics 2015/2016 study found that 92% of IT organization that outsource their disaster recovery said their costs were the same or lower than managing it in-house, and that outsourcing of disaster recovery has the highest potential for successfully lowering costs when compared with 10 other commonly outsourced functions.

The Right Services to Outsource

The Computer Economics study also found that the outsourcing of Web-ecommerce systems, IT security, data center operations and application hosting have the highest success rates for improving IT service levels over performing the same functions in-house. When deciding which functions to outsource, organizations need to assess their current talent pool and IT initiatives and determine where the highest need and return from outsourcing will be.

Keeping Up with Technology Integrations

According to Mary Shacklett, president of Transworld Data, a technology research and market development firm, system and technology integration is the hardest work in IT. She goes on to state there simply isn’t enough staff bandwidth to integrate all the diverse technologies that corporate IT departments are expected to implement. CIOs see this, so they’re looking to providers who have integration consulting experience or do the integrations themselves.

Meeting Compliance Mandates

Deloitte reports that 75% of the respondents felt confident in their outsourcers ability to stay on top of legal and regulatory issues. Choose a provider who understands your business and has experience with your compliance In most instances, a managed service provider will provide a higher level of initiative to meet compliance.

An outsourcing partner with the expertise and flexibility to provide a range of services to meet your needs will bolster both efficiency and innovation. OneNeck offers the full spectrum of hybrid IT solutions, from cloud and hosting solutions, managed services and ERP application management, to professional services and IT hardware. Our top-tier data centers and team of technology professionals can ensure your IT infrastructure is effectively managed for security, efficiency and competitive edge.

Is Outsourcing Right for You?

White Paper

Although every firm is a candidate for outsourcing, not every company is a good fit. Only by identifying an organization’s motivations, core competencies and corporate culture can a company properly determine if they should outsource.


This white paper presents an overview of the following issues an organization should consider when deciding whether or not to outsource its infrastructure and management.

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6 Common Challenges Driving IT Outsourcing
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