How to determine which level of IT outsourcing would most benefit your organization Featured

7:00pm EDT November 25, 2010
Don Goodwin Don Goodwin

As executives well know, the ebbs and flows of growing a business can lead to evolving IT infrastructure requirements. When outsourcing IT infrastructure to a data center colocation, managed hosting and managed services provider, identifying which IT services to outsource and which functions should remain in house is critical.

Smart Business spoke with Don Goodwin, chief revenue officer at Latisys, on how executives can effectively determine which level of IT outsourcing (ITO) would most benefit their organization.

What risks or costs do organizations face when handling IT infrastructure in house?

As companies grow, their IT infrastructure evolves, requiring additional capacity and process efficiencies. The systems and IT infrastructure required to support a company’s operations can quickly exceed available physical space, resources and capabilities provided by the in-house data room or data center. The company might then pursue a path of building additional data center space on site, or place their IT equipment in less secure, less reliable environments within their building — which risks security, reliability and uptime.

In addition to incurring structural and facility-based capital expenses as IT equipment needs increase, companies also must add appropriate staff to monitor and maintain all systems and ensure continuous uptime. They are often specialized for the systems they are hired to manage — and don’t contribute to the core business of the company.

Are there different types of ITO a company can leverage?

There are four ITO profiles enterprises typically align with. The first ITO profile is ‘off-site,’ which refers to a company ready to move its IT infrastructure to a secure, redundant powered ‘off-site’ data center facility. The second profile is ‘off-load,’ whereby a company seeks to ‘off-load’ some or all non-core IT systems and software applications. The third is ‘optimize,’ for companies with requirements for additional infrastructure management along with preserving capital. These companies benefit from access to proven support teams, bundled hardware and software, and a service level agreement for a monthly operating expense instead of incurring the capital outlay and headcount expense. Finally, with the ‘outsource’ ITO profile, a company would seek support for its above-platform applications and turnkey support services, in turn shifting segments of their IT systems, process and/or functions to service providers specializing in managing IT functions on a captive or shared tenant basis.

Please describe each ITO profile and the services that would best fit their requirements.

Off-site: The typical off-site company is looking for more security, reliability and scalability than what its in-house data center capabilities can provide. It requires a colocation provider that can offer data center space, with redundant power and cooling to ensure 100 percent uptime and 24-7 physical security, where the company owns and maintains its own equipment and software.

Off-load: Companies seeking to off-load IT infrastructure management often leverage managed services provided by a colocation provider to augment their colocation solution. They want to take advantage of managed security services such as managed firewall and VPN, as well as intrusion detection and intrusion prevention services. Companies may want to leverage around-the-clock availability of certified IT professionals for ongoing monitoring and management of core network services for their production environment, as well as managed storage and managed backup for complete data protection. This can often be combined with geographically dispersed data centers for disaster recovery and business continuity plans.

Optimize: As an enterprise’s IT requirements for increased efficiency and consolidation become a strong fit for virtualization and managed servers, it may explore options of how best to achieve the ability to turn up and run its applications quickly with minimal involvement from its own technical resources. To gain the benefits of this approach without incurring significant capital investment, companies can leverage the packaged solutions offered by a data center service provider and turn the associated monthly charges into more manageable operational expenses that permit greater financial flexibility.

Outsource: This company desires the features, functionality and benefits of its business applications without the headache of managing and running them. They want to fully outsource their investment in IT infrastructure and day-to-day IT management to achieve the highest level of performance for their spend. They seek a provider or providers who can go beyond the network and equipment, and provide above platform-level support and services.

What questions should an organization ask itself to understand what profile it falls into?

A company should first determine whether or not IT infrastructure management is one of its core competencies. The answer to this question goes a long way in determining the ITO profile that fits them best. Companies should consider what infrastructure improvements and additional capabilities can be achieved, and look at areas of IT spend that could more efficiently be managed by leveraging firms that provide IT infrastructure management as their core business. The decision will depend on their immediate and long-term goals and resource availability.

What type of provider offers ITO and what are the primary benefits of this approach?

In addition to the traditional IT consultants and contract firms for monitoring and maintenance services, the outsourced infrastructure providers are typically classified as data center or colocation providers, managed hosting and managed services providers. While each provides a distinct offering, finding a provider that can offer combinations of, or all of, these capabilities will often result in cost savings, as well as increased ease of management and control for the enterprise.

Don Goodwin is the chief revenue officer at Latisys. Reach him at don-goodwin@latisys.com.