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• Top 4 Reasons Businesses Outsource IT Operations And Why it Just May be the Best Decision You Make

Top 4 Reasons Businesses Outsource IT Operations And Why it Just May be the Best Decision You Make

written on August 17, 2012 by Matt Wilhelm

At some point in time, many of our clients struggled with the decision about whether to hire an internal IT staff, usually one or two people, or align themselves with a managed IT services provider to provide the expertise needed to make IT work.

Here are the top four reasons our clients gave us for making the decision to partner with our IT operations team.

1. Skillset Composition, Getting the Right People Onboard – Many small and midsized businesses find it difficult to attract and retain the right balance of IT skillsets. No matter the size organization, the operational skillsets required for IT are similar. Both large and small businesses need an IT team diverse in talents. Some team members should focus on strategy and aligning business with technology while other individuals are working on new systems deployments and project management. Still, other team members are more efficient providing the necessary end user support for your team to stay productive.

Additionally, and this is often overlooked, there are disciplines within the IT field. Some professionals are skilled in software and coding while others are skilled in networking and hardware. Rarely is this the same person.

Large enterprises can hire staff that can focus their time in specialty areas. But small and midsized businesses do not have this luxury. They can often only hire one or two people, and when they do they are left with a skillset void. Also, they’re usually asking too much from too few resources – it’s very difficult for someone to think strategically about how IT can truly help a business achieve its objectives while also fielding support call interruptions. Unfortunately, this has become the norm for many organizations.

In reality, these businesses need quite a bit of staffing diversity but they may only need 20% of an IT director, 25% of a systems engineer, 25% of a support engineer or helpdesk analyst, and 15% of a software and reporting developer. So what do they do? Does it make sense to hire four people? No. And usually it’s way out of budget.

Aligning with a managed IT services provider can be very effective for affordably achieving the necessary skillset composition. An account team can be assembled that reflects a dedicated professional in each area of expertise.

2. Recruitment, Retention, and Management – Those of our clients that at one point had internal IT staffs usually cite struggles with managing those individuals. The IT function often rolls up to finance or operations and therefore a CFO or COO is usually responsible for overseeing the IT team. Here’s the catch, they usually know very little about IT and even less about managing the department effectively.

At first, many businesses struggle with recruitment because they’re faced with the challenge of interviewing candidates for a job they know little about, or maybe even a job they cannot clearly articulate in a job description. Candidate requirements are fuzzy because the company often does not know the appropriate certifications, education, and experiences that contribute to a successful hire.

And once a hire is made, many businesses are challenged with how to keep their team members engaged. It’s common for a small IT department to feel: stagnant in their career, not up-to-date in education and certification, behind on technology advancements, under or over utilized, underappreciated, under budgeted, and more. These feelings usually result in high turnover, which can be a huge business continuity challenge for the organization.

Additionally, since these small IT departments often only see their own environment on a daily basis and nothing else, they usually aren’t bringing in good and forward thinking ideas. They often plug holes instead of create value. A solid, reputable, and appropriately staffed managed IT services provider can alleviate many of these challenges.  

3. Reduce Cost / Reallocate Cost to Revenue Creating Areas– Cost reduction is one of the most common reasons businesses outsource any departmental function. But why do they do so? The reason should be so that they can focus more pointedly on the parts of the business that drive revenue.

Understanding a business’s value added activities and how and why to optimize resources towards those activities is crucial to business success, not IT success, but business success (which is even more important). Cost reduction in specific departments allows a business to focus on its primary value added activities. For example, an accounting firm can allocate spend on being the best accountants they can be (i.e. training, recruitment, and business development). Reducing IT cost allows for the allocation of scarce resources (money and time) to these value added areas of the business, instead of on IT.

An IT services company’s value added activities are all related to IT; therefor an IT company may find it prudent to outsource accounting.

The ecosystem of cost allocation is best served by focusing resources on value added activities instead of non-value added activities. So cost reduction shouldn’t in and of itself be the ultimate reason for outsourcing IT. The real reason is for a company to focus more purposefully on their core business. More simply put, if you’re spending too much time worrying about IT and not on achieving your goals, you should consider outsourcing IT

4. Business Continuity – The fourth reason many of the companies that work with our team choose to do so is for business continuity. Many companies are rightfully concerned about this topic when they have a small IT department, often just one person. They think about what would happen if that person were to disappear, the old “hit by a bus” argument. Does anyone else know the ins and outs of the network, critical passwords and documentation, how backups are run, etc.? Can the IT person even go on vacation? What would happen?

Sometimes our clients have even felt held hostage by that internal IT person. We’ve seen cases where the IT person intentionally made it difficult for the business to get along without them, or at least they scared management into thinking so.

A managed IT services company can alleviate much of this concern. A reputable firm has the bench-depth of professionals necessary to ensure someone is available at all times whether someone is on vacation, sick, or if there is turnover within the company.

Some critical questions to ask when interviewing a managed IT services provider:
• How does the company manage documentation? Is it standardized so that the right information is captured for efficient and complete support?
• What is the company’s documentation sharing policy? At some point in time you may want to “divorce” your IT partner, are they willing to hand over your documentation? Remember, your IT services provider is simply the caretaker of your environment, you own it, not them. Ask about their ethics policy concerning this.
• How does the firm handle knowledge sharing internally? Do they have systems in place to document issues and resolutions? This will help them efficiently support you and become rapidly acquainted with your company, ultimately providing better end-user support.