Organizations are always looking for strategic ways to manage costs. One proven method is outsourcing IT support and other non-core functions, such as HR and accounting, to a specialist. Specialization allows outsourced organizations to achieve economies of scale, which lower costs while improving service.
What Kind of IT Outsourcing Makes Sense for Me?
The next question organizations need to answer before they outsource is, “What kind of outsourcing makes sense for me?” There are three primary options – working with a Managed Service Provider (MSP), a staffing firm or a consulting firm.
Staffing firms provide organizations with IT professionals who generally work for indefinite periods of time under your direction. Your firm is served as a unique client and no attempt is made to gain economies of scale by adopting similar technology practices between firms. The value of the staffing firm is they find you a qualified IT person.
Consulting firms are generally brought in to solve a particular problem, e.g. a server upgrade or cloud migration. They come in with a team, solve the problem and move on.
MSPs, in contrast, take on responsibility for the IT function. For a fixed monthly fee, they manage daily and long- term IT operations, including systems availability, security and user satisfaction. To do this, they provide personnel as well as standard tools, technologies and practices.
The Following Organizations Benefit from Outsourcing IT to an MSP
Organizations that benefit from outsourcing IT to an MSP, are those that want:
1. Access to a broad variety of specialists on demand
|A small internal team simply can’t know it all. Your outsourced vendor can afford to have specialists in security management, data backup operations, different SaaS products, systems monitoring, patch management, mail filtering, desktop operating systems from Microsoft and Apple and so on.|
2 . Leverage in vendor relationships
|Outsourcers aggregate purchasing across all their clients, creating leverage on price and access to unique support escalation paths due to their larger purchase volume.|
3. Improved security, availability and end user support
|Since contracts are generally structured to provide unlimited support for a fixed monthly fee, the MSP becomes profitable when the clients have fewer issues. The business model incents the MSP to have a common, effective set of practices across all clients. The outcome is a secure and reliable operation, which benefits both the MSP and the clients.|
4. Cost reduction due to economies of scale in design and operation
|Problems can be solved once and solutions are shared across a larger scope. The same goes for development of tools and procedures.|
5. 24 x 7 support
|Providing round the clock support so your executives and sales people get help whenever they need it, where ever they are, requires a large staff.|
6. The ability to handle spikes in support requests
|Your outsourcer has the scale to have a large number of people assist at any given time if needed. If your small internal team gets backed- up, you simply have to wait.|
7. Elimination of problems with recruiting
|All things being equal, an IT professional prefers to work for a firm where IT is the primary focus. An IT focused firm offers access to a peer group for problem solving, a meaningful career path and the opportunity to be a part of the primary mission of the firms. Non-IT firms will need to offer something more in terms of salary or other benefits to overcome this. Further, if you don’t frequently recruit IT professionals you may have problems discerning the relative competence of various candidates.|
8. Elimination of problems with turnover
|If you have a very small team, losing any one person can mean significant disruption due to understaffing and loss of institutional knowledge. Since an MSP serves you with a large team, documentation is critical and is therefore to up to date. In addition, the loss of any one person doesn’t impact service.|
9. Costs that scale directly with growth
|Contracts scale up or down one employee or computer at a time with an MSP.|
The Following Organizations Should Keep IT in-house
Outsourcing to an MSP, although often beneficial, is not for everyone. The following are some reasons to keep IT in house:
1. You have extraordinary employee loyalty and can not dismiss current employees
|In this case, a way to possibly get the best of both worlds, is to talk to outsourcers about absorbing your employees. If they can, your employees get a better career path and you get the benefits of outsourcing.|
2. You have barriers which prevent you from adopting the technology, support and security practices of an outsourced provider
|In this case, you will not realize the economies of scale that could come from working with an MSP. You should work with a staffing firm instead.|
3. Your employees require in person, “white glove” service and the firm can afford the cost of IT staff to support this
|You are better off hiring and effectively overstaffing in this case. The team approach that MSP’s use to ensure a consistently high quality of service generally can not deliver the concierge level of support that some individuals require.|