If a bloated IT department is a drain on your business, outsourcing IT services could help free up money and resources for what’s really important.
Running an IT department can cost a company a lot of time and money. Indeed, many business leaders joke that their IT department is the biggest department in their company – and they don’t even sell IT!
The problem: IT department bloat
IT departments often function as mini empires within a company. IT staff can make unilateral decisions on the equipment, software and services to acquire, the best systems to use, and how to keep training up to date.
Executives with no technical background can find it difficult to challenge the choices and expenditure, which can lead to a spiralling IT budget and ever-growing payroll. And finance directors are well aware of the problems of managing staff when they don’t have a clear understanding of what their roles are.
These problems can cause great friction within a company. According to Peter Hinssen, tech entrepreneur and visiting lecturer at London Business School, the phrases that business leaders most commonly associate with IT departments include: ‘complex’, ‘costly’, ‘always too late’ and ‘out of touch with reality’.
Even worse, most companies will not get full value from their internal IT staff. Most IT departments will have idle periods, and spend valuable staff time on the repetitive, day-to-day grind of basic IT support, or perhaps their staff just don’t have the right skills. And when there are big security or systemic problems, outside experts may still need to be hired in to find a solution.
Do any of these problems sound familiar? If so, your business might benefit from a change in the way the IT department is structured.
The solution: Outsourcing IT services
By outsourcing IT services, your company could immediately cut down capital spending (for example, on new hardware or software) and staff costs, instead paying for services only as and when you need them.
An IT department could then be consolidated down to one or two key staff – depending on the size of the business – supported by outside experts with relevant and up to date skills when the need arises.
External IT services could provide the basic ‘helpdesk’ support that so often takes up the valuable time of in-house employees, freeing up these key staff to concentrate on strategically important projects.
For small or medium sized businesses, outsourcing IT services could also provide access to a wider array of skills and competencies than a single technician could offer. No one employee could be proficient in supporting all systems – and offer networking and web design skills too. But a single contract with an IT professional services firm could deliver all that.
There are no financial surprises either. Instead of irregular and unexpected costs, IT spending can largely be confined to a single, predictable payment – a huge relief for the heads of small and medium sized enterprises. And this payment is tied to a Service Level Agreement to ensure the business’ needs are met.
A 2011 survey by CompTIA, the IT trade association, included organisations relying on outside IT professional services for at least some of their IT. Nearly half of them said that doing this had allowed them to trim expenses by a quarter or more. 13% said they had cut annual IT expenditure by more than half.
What’s more, 60% were so satisfied that they planned to take outsourcing IT services even further by 2013. Network administration, maintenance and help desk, database support and applications support - both bespoke and legacy - were among the services that companies intended to move to outside providers.