Guide to IT Outsourcing

Everything you need to know about outsourcing but were afraid to ask!

Why Outsource?

The desision to outsource IT is usualy based on one of these reasons:

• An internal IT function is more expensive
• Staff need to focus on the core business
• Quality of in-house IT is not up to scratch

All of these are of course valid, but we urge you to view outsourcing in a slightly different way- the value exists, but not perhaps where you think!

For smaller networks, for example, the cost savings may be negligible, or even non-existent. If a three-man support team is reduced to two by outsourcing part of the IT function, it is highly unlikely that the outsource agency function and associated project management time will come to less than the cost of the in-house staffer.

What you will have, though, is access to a far broader skillset- and the support of additional know-how if necessary. That know-how will also be unbiased; focused on the general business benefits of technology, rather than a view clouded by your current IT situation.

How much to Outsource

You also need to consider how much of your IT function to outsource. Often, the instinct is to simply hand over the whole process to a third party; but this may not be ideal. Firstly, you may be relinquishing control over elements of your business which are part of a genuine competitive advantage; and which should be kept closer to the core of the business. Equally, you may be handing over very mundane functions, which you could comfortably handle in-house without the additional expense of an outsourcer's management fee.

As you can probably guess, Principal's approach to outsourcing is based on pragmatism rather than received wisdom. To begin with, ask yourself what prompted you to consider outsourcing in the first place? If your support staff are tearing their hair out with unreliable desktop PC's, all running different incompatible systems, then perhaps the problem isn't resource but procurement- it's time to think about an upgrade. (An outsourcer would be unlikely to improve this situation- indeed beware an outsourcer that would claim to!)

Once you've considered the health of your system, consider the elements that you do not want to lose control over. These will be key business functions, and/or elements which are actually running smoothly anyway. That should leave you with the areas in which you are under-skilled, or require mission-critical assistance (e-mail, backup and antivirus are common culprits). You may also want to outsource technology for a new venture until you have expanded your in-house team to cope- these quantum leaps in a business are often ideal candidates for outsourced assistance.

Heads-Up Questions

Here are some more questions about responsibility to consider, when it comes to implementing an outsource relationship:

• What happens if there is a fire? Who is responsible for getting my company back up and running?
• What if my IT manager resigns? Is anyone else capable of running the network and solving problems? And is there enough documentation for someone else to step in?
• And at the end of, say, a one year outsource contract, is there a handover plan (either back in-house or to another third party)?

For more advice on whether outsourcing is right for you, read our guide “Do I need to Outsource”, here. Or, find out about our wide range of outsourcing options here.

Your Principal Adviser will be able to answer any questions you might have, call us now on 0800 132908.