What is IT outsourcing?
According to Gartner, IT outsourcing is the use of external providers to effectively deliver IT-enabled business processes, application services and infrastructure solutions.
It can also be defined as contracting outside vendors (who may be individual IT professionals, consulting firms, MSPs and otherwise) that help with various IT functions, from data entry and app maintenance to data center operations, disaster recovery and IT management. In simple words, different tiers of support and specialized (or further sourced) implementation.
MSPs such as ourselves help clients to develop the right sourcing strategies, select the right IT service providers, structure the best possible contracts, and govern deals for sustainable relationships with external service providers.
How to perceive IT outsourcing?
The explosive growth of the IT industry has enabled companies to create a competitive environment where suppliers of IT – outside companies as well as internal departments – are constantly battling to provide better IT services, thereby justifying their very provision of services, and turning IT outsourcing into a kind of fluctuating commodity.
IT outsourcing is a business decision to divide IT operations into two categories: outsourced systems and strategic systems. The cheaper option of hiring a managed service provider who could take care of more basic IT operations would free up the time of the internal team to concentrate on growth, without being too overwhelmed with the sometimes-mundane everyday issues.
Furthermore to accurately evaluate the cost, or better say the value of IT, IT outsourcing should be perceived through the lens of an economist. Hire one person to do the work of three, or for the same money, hire a team of people to do the proper work of one. With this mindset companies would never develop their own internal departments, yet having an in-house team is essential in the long-run.
Experienced in house IT managers have realized long ago that deciding to outsource an IT activity isn’t the end of the manager’s work. The kind of selective-outsourcing approach that is referred to may seem like common sense. But it represents a significant departure from the conventional approach of keeping operations centralized and therefore has only reached its full potential among multinationals who have the financial resources to venture and discover the truth of outsourcing – that it’s lean’.
Why outsource IT?
Immediate benefits can be gained by outsourcing IT services through Managed Services.
1. Control IT Costs
Outsourcing converts fixed IT costs into variable costs and allows you to budget effectively. In other words, only pay for what you use when you need it, but this depends on the level of cooperation between you and the MSP. For instance, complex long-term SLA agreements that cover emergency response, disaster recovery, storage and backup services have a set monthly fee regardless of basic hours serviced, and in those cases, any overtime is billed additionally to the monthly commitment.
2. Reduce Labor Costs
Hiring and training an IT staff can be very expensive, and temporary employees don’t always live up to your expectations. Outsourcing lets you focus your human resources where you need them most. In the long-term outsourcing on-demand, daily, weekly or monthly tasks like data entry, routine checkups, office hardware maintenance, system and software updates, vendor management, hardware procurement, the latter will benefit you as it will allow your core staff to concentrate on what matters most, growth.
3. Qualified doesn’t Equal Experienced
Few problems are new to expanding companies, particularly in-house IT employees who may lead an isolated existence and may no longer be qualified to perform high-performance tasks and are thereby suited for overseeing projects rather than implementing them.
It is hard to compare the slow nature of a non-tech in-house unit and the fast-paced world of a managed service provider, what is certain is that you should take advantage of both.
4. Increase Efficiency and Competitiveness
Organizations that try to do all IT Services in-house themselves can have much higher research, development, and implementation time, all of which increase costs and are ultimately passed on to customers.
5. Quickly Implement New Technology
A quality outsourced IT service organization will have the resources to start new projects right away. Handling the same project in-house might involve weeks or months to hire the right people, train them, and provide the support they need. For more complex implementations, quality IT companies will bring years of experience, in the beginning, saving time and money.