The value of outsourcing IT

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Many organizations invest in Information Technology (IT) as a strategic advantage; others see it as an expensive necessity.  We tend to favor the former perspective, but empathize with the latter; although IT can consume significant financial resources, it is a cornerstone of most modern organizations.

Either way, a key decision is whether to keep IT internally within the organization or outsource it to a Managed IT Services Provider (MSP) like Bryley Systems.  With an MSP, the basic tenet is a long-term relationship between the client and the MSP with an agreement that details types and levels of service at a fixed amount.

We reviewed some considerations of outsourcing in Outsourcing IT in the May 2014 issue of Bryley Information and Tips, but what of its value?

Let’s start with the players, their interests, and their capabilities.

The primary player:  The Client

The client has technology needs and issues, from end-user oriented (“Please show me how to rename a file.”) to network-level critical (“The Internet is unavailable.”) to business based (“How do I plan and budget our technology requirements in a world that is constantly changing?”).

The client has a limited technology budget spread across at least these areas:

  • End-user equipment and applications – Potentially an area of frequent change; typically a three to six-year lifespan with ongoing maintenance
  • Network equipment and software – Relatively stable, but some replacement required on a four to eight-year basis with ongoing maintenance
  • Cloud resources – Fairly stable; requires periodic payments, typically on a per-user basis
  • Security – Often under-invested, especially in the need for multi-layered defenses and ongoing security training
  • Support – Fairly stable in an MSP-supported environment
  • Training – Often neglected, but useful to boost productivity

The client seeks a stable, reliable, optimized IT environment; one that is patched appropriately and is secured against external and internal threats.

The second player:  The MSP

The MSP has a competent, stable, well-trained, and certified technical team with different levels of capability:

  • Technicians supporting end-user environments (PCs, MACs, mobile devices)
  • Engineers servicing back-office/Cloud networks (servers, firewalls, routers)
  • Consultants providing high-level planning, design, and troubleshooting

The technical team works closely with an account-management team, which owns the client relationship and maintains communications while advocating on behalf of the client.  The account-management team discloses the client’s interests and requirements within the MSP; they also set client expectations based on close alignment with the technical team’s schedule and availability.

The MSP spreads its resources across a manageable number of clients, typically assigning an account and technical person to each client.  Exceptions within the client’s environment are noted and shared, allowing others to assist when the assigned personnel are unavailable.

The billing is periodic, usually monthly, providing predictable, recurring revenue to the MSP to support its operations and finance its constant improvement.

The MSP is led by capable, experienced management utilizing a holistic service-management system for ticketing, account-management, reporting, etc.

Next:  What did the survey reveal?

CompTIA, a respected, IT-industry trade association, surveyed 350 companies in June 2015 to compile its Fourth Annual Trends in Managed Services Study.  Their results include:

  • 68% had used an outside IT firm in the last 12 months
  • 64% believe they use an MSP for at least one operational function
  • Six in 10 said it was a collaborative effort with the internal IT staff
  • Many seek efficiencies and competitive advantage in addition to cost savings

Most use their MSP in these areas*:

  • Repairing/troubleshooting IT systems
  • Deploying/installing/integrating
  • General IT consulting
  • Cybersecurity

*Please see “CIOs give Managed IT Service High Marks” by Dennis McCafferty ofCIO|Insight.

Finally:  Where’s the value?

Value is not hard to define, but sometimes difficult to quantify.  Value can often be in the eyes of the beholder, having greater weight with one and less with another.

The easily discerned areas of value include*:

  • Highly competent resource to efficiently resolve difficult issues
  • Service Level Agreement (SLA) with detailed response times
  • Predictable support budget
  • Proactive, 24×7 coverage
  • Team approach
  • Reporting

*Please see 7 Advantages of Managed IT Services by Chase Moritz of Heartland Technology Solutions.

Some of the other, less-quantifiable considerations that come with outsourcing:

  • Secure, stable environment from well-honed best practices of the MSP
  • Strategic, flexible partnership with ongoing counsel
  • Supplement to existing IT team (if any)

For the client, our recommendation is to establish and maintain a strategic relationship with an MSP of similar perspectives and sufficient resources, one that can respond when needed, but acts proactively to manage, optimize, and secure your IT environment.  In a mid-sized IT environment, say 25 to 85 technology users, the typical IT challenges can be met by the MSP at a fraction of the cost of having a comparable team on your payroll.