I got this in the mail as a submission for the IT Manager blog from a contact of mine in Calgary - Stuart Crawford. He raises some interesting points about staffing and using internal vs. external resources. I am a little on the fence on this one as I see value in having both types of resources, based on business needs. Stuart makes full disclosure at the end of the post as his company provides IT Outsourcing services.
I think I might invite Stuart to be a panelist on an upcoming WebCast in the Ignite Your Career series. He could bring some valuable insight into partnering with MS Partners.
What about your thoughts on this topic? Have you considered IT Outsourcing for your organization? Have you explored your options? Which route did you take?
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Stuart R. Crawford (Calgary, Alberta)
Outsourcing your IT brings additional business value
Businesses today wrestle and grapple with the thought of hiring their own technology support staff to support their daily need for IT support without fully understanding the risks and the costs associated with having their own team of technology professionals.
Business owners, C level execs and Managers are attracted to the idea of having a team or a consultant readily available within shouting distance down the hall, basically having an IT resource committed to them 24 hours a day, 7 days a week. However, many of today’s business owners across the country are not aware of the total risks their business is exposed to by electing to bring their technology support in-house.
More often than not it is purely a cost based decision, on the surface it may appear to be more cost effective to hire a consultant or employee who is committed as a full time employee. CFOs and Accounting Managers often look only at the cost of having their IT outsourced and or attracted to hiring someone for a few thousand dollars a month as part of their staff will save their company in the long run. This is not the case in reality and by having a full time employee will actually end up costing business today more in the long run.
So what are the advantages of having an IT Partner who focuses on delivering a complete managed technology solution? There are a number of immediate benefits over having a full time employee. These benefits include:
Michael Fafinski, President of Syand Corporation in Minneapolis states about the value of having a full service IT partner can bring to a company, “having a full feature IT partner eliminates the “tunnel vision” found with internal employees. Too often, employers are limited only by the expertise of their internal employees and lose opportunities to improve their business.”
Many firms that elect to go with their own in-house IT person, more often than not resent this decision down the road. What seemed like a great idea quickly turns into a huge business mistake that ends up costing them.
Randy Biggs from VACS in St. Catharines, Ontario shares “Hiring a trusted IT partners allows a company to have access to many additional certified resources without having to keep paying for their staff to get certified. I find that with hired staff, you get one of two types. One that always wants the latest and greatest that many companies cannot afford to keep up with and the second, someone who becomes complacent and only does what needs done. In either case, they aren't looking out for the best interest of the company.”
When a company elects to retain an outsourced firm over hiring internal, they are getting service from a company who is focused on ensuring the IT needs are being addressed in the most efficient manner possible. Many trusted IT partners are focused on the bigger picture, ensuring everything is looked after in a company’s environment including:
Partnering with a trusted IT Partner brings value to any business no matter what the size, what makes more sense to you? Limiting the knowledge, options and having to deal with people challenges such as complacency and boredom or expanding available options by having a wonderful relationship with a trusted IT partner who understands what business needs to grow, increase profits and the importance of the right technology solution.
Stuart Crawford is the Vice President of Business Development for IT Matters Inc. A Calgary based Professional Services firm focused on delivering Managed IT Services in Southern Alberta. IT Matters is a Gold Microsoft Partner and Small Business Specialist. Visit their website at http://www.itmatters.ca. You can contact Stuart at email@example.com or through his blog at http://www.stuartcrawford.com.
Stuart has raised some very good points. I can relate to them being a line manager myself. At my current job we require resources day in and day out due to nature of the business and demand of growing markets (me been in Middle East Region). An organization with right mix of outsourced resource and local resource can achieve operational excellence which is most important in IT/Services industry.
One of the point for going with a outsource service provider could be the career growth of resources within the company if they were to be hired full time. A company can only do so much with regards to career growth and competence enhancement and then different regions will have labor laws regarding laying off people which sometimes makes it hard to let go of people.
On the flip side the quality of outsourced resource is an issue (at least in the region I operate). Different performance measurement on resource and services should be in place to ensure that resource/service provider do deliver what they are supposed to deliver (this is apart from SLA's).
Knowledge sharing is another important aspect. Stuart mentioned about employee leaving and taking the knowledge with them. This is very true, however a company should ensure that they have knowledge management/sharing processes and tools in place and employee (either local or outsourced) use them day in and day out so the IP of the company is shared and understood by everyone.
My 2 cents from Middle East experience.
Outsourcing can provide benefits to both the small and large customer but it is not a “set and forget” solution. You as the IT manager must decide which tasks make sense to outsource and which make sense to internalize. You as the IT manager must decide on what are the service levels that your business requires. You as the IT manager must hold the service provider to those SLA’s.
Another thing to consider, with each outsourced resource you have supporting your environment you pay a portion of the overhead of the outsourcing company, they do want to cover their expenses and they do want to make a profit. Depending on how lean their operations are the cost may be significant, for example do they have their offices in a downtown AAA class building verses one on the outskirts of a city? A resource that may cost you forty dollars internally may cost you sixty as an outsourced resource.
You as the IT manager still need to manage the onsite outsourced resources, they may work for XYZ Corporation but you set the priorities for the work that is to be done. You have to request replacements when they do not fit the culture of your business you have to deal with the client issues resulting from their work.
As for training and growth, if your company is dynamic there should be opportunities for growth within and without of IT. Training for your staff is an expense and it brings benefits to your organization. An outsourced resource that receives more training may not remain at your shop as they no long fit the role or they will cost more and their knowledge is lost when they move.
Many outsourcing providers tout their 7/24 hour monitoring but unless they support that monitoring with notification and resolution of the incidents on a 7/24 basis it is of no value as the work still gets done the next business day. Again service levels are important.
The bottom line is you should periodically review your business requirements and what you outsource to make certain that your business is getting the value for the dollars spent.
Very insightful comments. Have you been in a situation where outsourcing worked really well or has gone very badly?
I have been on both sides of the fence, delivering outsourced deals and managing a mixed in-house / outsourced environments. over the years I have been involved with several outsourcing deals that have worked well. In all cases I have seen the need for active management of everybodys expectations.
Yes I have been involved with many outsourcing agreements some that were fantastic some that were not so good. In the ones that worked the customer took and active role in setting and managing the SLAs.
The less sucessful ones lacked any setting expectations or SLAs. Set and for get does not work.