IT is different. Finance has been around for centuries, as have Manufacturing, HR and Sales & Marketing. But IT is new and still emerging. We’re not sure where it will end up, but it’s always on the move and that’s a bit of a problem for most companies. That problem manifests itself in terms of disappointment that IT doesn’t live up to expectations or frustration that it disrupts your business.
Unless IT is your core business, it can be a major distraction and it’s a natural choice to outsource. But where do you start and what do you outsource? Perhaps you’ve already taken the plunge and are disappointed with your current service provider? We are dealing with a major decision that needs careful thought. This paper is designed to get you thinking and help you with your decision making.
Hosting
Where do you house your IT hardware? You have the choice to provide your own premises and facilities, or have a service provider house them in a purpose built data centre. You will still be responsible for administration and management, but you will no longer need to provide dedicated floor space, power, cooling, security and fire prevention facilities. They will all become the responsibility of the hosting company.
Managed Service
This is where you hand over all or part of the day to day running of your IT infrastructure. You no longer have to worry about backing up company data or applying security updates. New installations, moves and changes can all be managed by an external service provider as can your helpdesk, fault and incident management, asset management and software licensing.
Managed Hosting
A combination of Hosting and Managed Service. Essentially IT infrastructure becomes a service, which is monitored and measured against a service level agreement (SLA).
BPO
Now we move beyond IT and outsource a complete business process. This can range from a simple process such as payroll, through facilities, catering and security, right up to the management of core business processes, such as the management of “closed book” insurance policies or mortgages.
The role of Transformational Outsourcing
Outsourcing can solve problems. When it’s simply a matter of scale or expertise, it can provide a simple and speedy solution to the complexity of running a business. But when there are endemic problems, there may first need to be an element of transformation. For example, when the concept of outsourcing was initially introduced, organisations saw it as a way of purging themselves of chronic problems. And IT was right at the forefront. Some service providers were quick to rise to the opportunity to bid for major long term contracts in order to secure a guaranteed revenue stream. It was the era of “your mess for less” and it soon became clear that the act of moving a problem rarely solved it. Fingers were burnt, companies wobbled and lessons were learned. Nowadays, we see a more mature approach. Rather than just relocating the existing infrastructure, some transformation may be required prior to transition, in order to derive value from outsourcing.
Focus on the business
What business benefit do you gain by running your own IT infrastructure? In the majority of cases, it’s probably none. However, IT can develop to the point where it gets a life of its own. It can become a bit of a hobby for enthusiastic techies, which is fine for them, but is it helping your business?
Of course, yours may be one of those few organisations whose business is differentiated by IT innovation, but it will still probably be the applications that are the distinguishing feature, rather than the underlying infrastructure. So why not spend your time running your business and let someone else take the strain?
Reduce risk
Outsourcing can be a very effective way to reduce business risk. Improvements in IT management will contribute to the reduction in risk. When you take the managed hosting route, you can expect a significant improvement here, due to the application of best practice operational management.
Improve business agility
How often are important business projects delayed by the time taken to put new IT systems in place? Using today’s best practice, this delay can be reduced or even avoided all together. Technology and process have advanced dramatically and specialist service providers are in a position to pass the benefits on to their customers. Indeed it is not unusual to see deployment times reduced by a factor of anything from 3 to 10. Although this progress is based on technology enablers, it is not possible to buy this sort of improvement out of the box. It takes experience and expertise to put the right processes in place to make the technologies work for your business. Indeed, these processes become more critical as the power of new technologies increases.
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