BENEFITS OF IT OUTSOURCING
Evaluating the Benefits of IT Outsourcing
An IDC White Paper Analysts: Cynthia Doyle and David Tapper
The decision to outsource your Texas network solutions can be a painful one. Network Elites will provide a free assessment so that you can be confident in your decision before you commit.
Potential cost savings associated with an outsourcing engagement depend on the size of the company and the scope of services involved, among other factors. Generally, a company considering whether or not to outsource should look at the explicit cost of outsourcing – the direct cash outlay – and compare this with the costs of keeping the function in-house to see what cost savings, if any, are generated. However, within the scope of a cost-benefit analysis, any costs incurred by the decision to outsource must be weighed against the potential gains of outsourcing, measured by metrics such as access to new technology and skilled workers, improved service levels, and improved time to market.
Ultimately, the decision to outsource the ongoing support and management of your company’s IT infrastructure may rest on the realization that you do not have the resources – time, personnel, or financing – to do it all yourself.
Network Elites provides the IT outsourcing capabilities needed for businesses in Dallas (DFW), Austin and San Antonio.
Challenges of Managing the Computing Infrastructure
Outsourcing your network solutions can be a difficult decision for numerous reasons. From concerns about altering your current staffing solutions to uncertainty about the cost effectiveness, Network Elites will help you manage the various challenges of managing computing infrastructure before you make any commitment. It is our goal that you are as comfortable and informed as possible before the outsourcing process even begins.
Our services typically include:
- Providing a scalable, secure, and highly available computing infrastructure that minimizes costs while ensuring service quality
- Controlling network and systems complexity and obsolescence while managing an increasingly expanding infrastructure
- Ensuring bandwidth capacity and traffic loads at predictable costs to support mission-critical application environments
- Competing in an environment where rapid time to market and expanded geographic reach are critical to success
- Enabling an agile, flexible work environment that supports a rapid response to changing market demands
- Managing a multitude of best-in-breed service providers and product vendors needed to support the highest degree of service delivery
- Experiencing difficulty hiring and retaining skilled IT staff.
The potential savings are likely one of the most significant reasons you are considering outsourcing the computing infrastructure management of your company. Depending on your company’s size and the extent of the management resources you require, your savings could vary significantly. The explicit costs of outsourcing, such as the direct cash resources you will expend to obtain services, should always be compared with how much you are currently spending on personnel and other resources. This comparison will help clarify whether outsourcing is the right option for your company.
A cost-benefit analysis is always the first step to determining whether outsourcing will be beneficial for your business. Access to new technology and highly skilled workers should be compared to the potential costs. Even if the costs of outsourcing seem prohibitive at first, it is entirely possible that the improved service and more efficient production will more than cover those costs. Outsourcing is often great way for businesses to scale their distribution without scaling their in-house budget for these reasons. While the decision to outsource your company’s IT infrastructure management is a difficult one, there are many cases in which you may not be able to afford keeping your management system in-house.
Common Problem Areas
While every company is different, there are some common problem areas or “pain points” where businesses tend to have problems managing in-house computing infrastructure. Many of these problems can be solved by outsourcing your system management to an external provider such as Network Solutions. One of the most common pain points is scalability. As your business grows, you will need to continue to scale your IT department to manage the increased risks to data and overall security. Bringing on more in-house security professionals is often far more costly than outsourcing your security management to a company with the skilled professionals and technological resources you need.
Another common issue for growing businesses is network control and systems complexity and obsolescence. Your bandwidth capacity and traffic loads will also increase as your customer base grows. From server acquisition to improved network service, these are significant costs for a business going through a heavy growth phase to take on. You may also have difficulty competing with larger businesses in your sector that have greater in-house resources or outsourced services that allow them to deliver goods to market at a rapid pace. As your business expands into more geographic areas, this becomes an even more critical component to success. Other issues include hiring resources to maintain a skilled IT staff, best-in-breed service provider management and adapting to a changing market.
With offices in Dallas and Austin, your IT headaches are our strengths.
Benefits of Outsourcing
Tracking the potential cost savings associated with outsourcing will depend on a number of factors, including the size of the company and the scope of services involved. However, any type of outsourcing engagement has a number of realized benefits beyond potential cost savings, including the following:
- Ability to focus on core competencies. By handing over non-core activities to a trusted third party, a company can concentrate on activities central to its value proposition and increase its competitive positioning.
- Faster and higher-quality service and improved efficiency. Vendors’ economies of scale, combined with service level guarantees, translate into increased operational efficiency for a company. For example, outsourcing vendors typically offer service level agreements (SLAs) for availability of at least 99.9%, and many include financial penalties for downtime. Along with higher-quality service, many outsources claim to reduce cost of management by up to 25%.
- Access to new skills and technology. Outsourcing gives a company access to resources not available internally, such as modern, up-to date technology and skilled human capital.
- Greater flexibility. The flexibility gained through outsourcing helps a company react quickly to changing market conditions, fluctuating demand cycles, and increased competition.
- Staff reallocation. Personnel whose job responsibilities are reduced or eliminated by outsourcing can be reassigned to other, more strategic tasks.
- Lower long-term capital investments. In a typical IS outsourcing contract, the vendor takes ownership of and responsibility for managing all or part of the client’s IS operations or infrastructure, thus eliminating the client’s ongoing investments in computer equipment. The capital funds previously allocated for computer equipment are freed for spending elsewhere.
- Improved predictability of costs. Outsourcing provides a company with predictable yearly costs for the management of all or part of the IS infrastructure.
- IT systems in the care of a trusted third-party service provider, a company is assured of a scalable, secure, up-to-date computing architecture at a predictable cost.
Desktop management services can be provided internally through a company’s in-house IT department, or the services can be provided externally as part of an outsourcing contract with a third-party IT services vendor. Table 1 summarizes the pros and cons associated with both internal and external desktop support.
We offer assessments for all IT services offered throughout Texas with offices in Dallas and Austin.
How We Work
We work systematically with you to understand your goals and objectives and meet them within your calendar and budget parameters. We believe in the PDCA (Plan-Do-Check-Adjust) management method for the control and continuous improvement of processes.
Together, we establish the objectives and processes necessary to deliver results in accordance with the expected output (your goals).
Then we implement the plan and execute the process. We also collect data for analysis in the steps to follow (Check and Adjust).
We study the actual results and compare them against the expected results to determine any differences. This step involves the holistic approach of meeting the corporation’s needs as well as each individual’s needs and satisfaction levels.
Lastly, we take any corrective actions needed and together we look forward to determine where to apply changes that will include process improvements over time.