IT outsourcing Featured

11:11am EDT October 23, 2003
Technology professionals and business executives may be overwhelmed by the complexity of their company's IT environment and thinking about outsourcing.

When deciding whether to outsource, there are many factors to consider. These include identifying whether investment in a particular technology is the best decision, given how quickly it can become obsolete; how scalable the IT infrastructure should be to support the demands placed on it; how effectively you can manage this environment to support corporate business objectives; and potential cost savings.

Potential cost savings depend on the size of the company and the scope of services. Generally, a company considering whether to outsource should look at the explicit cost -- the direct cash outlay -- and compare this with the costs of keeping the function in-house. However, any costs incurred by outsourcing must be weighed against potential gains, 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 to do it yourself.

Managing computing infrastructure

Some of the "pain points" your company may be experiencing in managing its computing infrastructure could be driving your need to outsource your systems. These pain points can 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 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

* 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 combination of these pain points forces companies to lose focus on their core competencies. They are turning to external service firms to assist in the development and management of their IT infrastructure, from the network to the desktop. There are many benefits to outsourcing your IT infrastructure.

* Ability to focus on core competencies. By handing over noncore activities, 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, translates into increased operational efficiency. Along with higher-quality service, many outsourcers claim to reduce cost of management by up to 25 percent.

* Access to new skills and technology. Outsourcing gives a company to 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 can be reassigned to 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, eliminating the client's ongoing investments in computer equipment.

* Improved predictability of costs. Outsourcing provides predictable yearly costs for the management of all or part of the IS infrastructure

By placing 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. MARK WILSON (mwilson@pconcall.com) is vice president of operations at PC On Call. PC On Call focuses on small and mid-sized businesses, first understanding your business goals and objectives, then aligning technology to reduce costs, increase productivity and provide competitive agility. Get your free business technology assessment, a high-level summary of how your business stacks up in these five areas, by calling PC On Call at (888) 726-6225, ext. 2124, or by visiting www.pconcall.com.