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Are you thinking about Outsourcing IT Processes?

Interview done with James Elstob of MDM Technologies

outsourcing IT

When outsourcing IT processes, there are 3 key points to consider:

1. How do I know I am ready to outsource my IT?

If you are already asking this question, you should outsource your IT. Rather get the experts to assist, or conduct an assessment of your business and see where it could be implemented, instead of bogging your CIO down with issues they shouldn’t be dealing with. (It’s like getting a doctor to check your plumbing or a plumber to check your heart).

2. What should I consider when appointing an outsourced supplier?
There are 7 stumbling blocks to think about, they are:

  • Costs

Outsourcing costs are made up of consolidated amounts, so it looks more expensive than it is. If you had to add up all the costs for what it would take to do this in-house, you’ll see that outsourcing is actually cheaper. The pricing of an outsourced service is usually based on the expertise of the staff an IT company has, the solutions that they offer and the quality of customer service they provide. If any of these are important in your decision-making process then cost shouldn’t be a deciding factor.

  • Location

When we talk about location, it doesn’t necessarily mean that the IT provider should be on your doorstep. All “location” refers to the offshoring of IT support. Significant costs can be saved by utilising resources in another country, however there could be cultural, language and time zone issues that need to be considered.

  • Communication

It’s easy to take the viewpoint that once you have selected an outsourced IT partner, it is no longer your issue. However, what may have worked when you first engaged with an outsourced IT partner may not be the best route moving forward once you are up and running, or as your business develops. 

  • Scope

If you don’t spend enough time clarifying business processes and requirements, and documenting these, your outsourced working relationship can fall apart. Without a clear scope of a project at the outset, it’s easy for expectations to vary between parties.

  • SLA’s

If you don’t understand or select the right Service Level Agreement (SLA), this can often prove to be a major issue in an outsourced relationship. All too often, a flash point can occur when the customers’ expectations of response times don’t match up with those that are being delivered by the outsourced partner. If this is because the outsourced partner is not meeting agreed SLA’s that is one thing, but if it is down to a lack of understanding of the SLA, then this can be a stumbling block that is hard to recover from.

  • Qualifications

Ensure that you are selecting a preferred support provider – there are a lot of dodgy people out there.

  • Management

Once an outsourced partner is selected, this shouldn’t be the end of your project. All too often, conflict arises because a situation becomes a ‘them vs us’. Don’t be afraid to push back (to management) when a outsourced supplier comes on site and users refuse to let them work on their devices.

3. How can I mitigate these stumbling blocks? 
By outsourcing various IT functions to the right partner, you can make some significant savings (by reducing the need for hiring in-house staff). This also allows you to free up your existing IT team’s time to focus on more value-added projects. Calculate in-house costs by doing an assessment, and consider the following:

3.1 HR Costs

  • Project Management costs from Senior Staff
  • C-level input costs
  • Specialist Consulting costs
  • Recruitment costs (if you hire someone through a recruitment agency for R50 000 p/month (R600 000 a year] you need to pay the recruiter 20% of that, which is an amount paid upfront).
  • IP Loss and Security Risks when a person resigns

3.2 In this day and age, most fixes can be performed remotely, and through the use of remote monitoring software, the IT provider can be proactive rather than reactive to potential issues.

3.3 Regular, open and two-way communication is vital in ensuring a successful relationship that is mutually beneficial to both parties.

3.4 It is vital to have detailed and documented procedures in place before progressing with an outsourced relationship.

3.5 Before signing anything, ensure that you are happy with the SLA and understand everything in the document to avoid any pain points later on.

3.6 Check CV’s, make sure that you suppliers are Microsoft Partners and that their employees carry the necessary skills and certifications/diplomas required.

3.7 Outsourcing is designed to be an extension of your existing business. Having a dedicated contact who knows your business inside and out can be pivotal in ensuring a successful relationship- this is when your outsourced partner becomes a strategic partner and can work with you to support future business growth. 

3.8 Get buy-in from senior staff (you’ll need senior management to buy into the support process, as they’ll be required to adapt and allow the new support company to assist them correctly).

Outsourcing IT

Read more about Insourcing vs. Outsourcing your IT here.

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