Outsourcing is more relevant than ever.–  By Mike Porteous, Datacom, General Manager Outsourcing. It has been a tough year for most businesses. While the New Zealand economy has been relatively insulated from the global financial crisis, local businesses continue to feel the effects. Over our decades in business we have seen that interest in infrastructure outsourcing heightens during times of economic pressure – and this current financial cycle is no exception. Reduced IT costs Outsourcing allows organisations to reduce costs – and the resulting cost reductions create additional capital for reinvestment in the most important parts of the business. The best outsourced providers can help companies to benefit from the latest technologies, and leverage their economies of scale and innovative processes, to obtain the results the company requires, including greater business efficiencies and standardisation. Defined service levels and controls increase accountability while improving quality, predictability and risk management. Meanwhile, outsourcing certain parts of the business allows companies to redistribute their employees' time and resources to core business areas that have a direct impact on the bottom line. Simplification of your IT operations As organisations grow, or acquire new operations, the IT landscape can get very cluttered. Experienced outsource providers bring a lot of insight and hard-won experience into the equation. They can help to simplify IT operations for their customers through rationalising and consolidating the environment, monitoring, measuring and automating it , managing asset lifecycles, and implementing industry best practice such as ITIL-based processes. This leads to improvements in IT operational performance: fewer outages, better performing business solutions, fewer incidents, seamless change and improved security. By measuring and reporting the outcomes, outsourcers can drive continual improvement. Improved efficiency For most organisations, it is not enough just to reduce costs and simplify operations. Businesses also want to see IT significantly improved in terms of efficiency and effectiveness. Effective outsource providers are able to assist a customer and undertake a series of ‘business-transformation' projects to improve the value derived from IT in that organisation. Customers are continuing to consolidate systems and virtualise physical environments to improve reliability and agility and reduce costs. ‘Transformational' outsourcing can also have a positive environmental impact through use of innovative data centers and workplace platforms that are designed to deliver energy efficiency and reduced carbon footprints. So, given the benefits available, how do you ensure outsourcing is successful? In our experience, you need an outsource provider that is flexible, agile, and behaves like a true partner in your business. In addition to the traditional focus on service level agreements, some things you might consider to ensure an enduring partnership are:

• Flexible contracts, including volume-based pricing
• Demonstrated innovation in services.
 
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Flexible contracts There's nothing like a business having to shut down a product line, department or site office to make a CIO understand the flexibility of their outsource arrangement. Flexible contracts with volume-based pricing provide customers control over the volume and scale of services, allowing for expansion and contraction as business conditions change. Open book pricing allows further control over end costs. In the last year, we've seen customers with outsourcing arrangements incorporating these features adjust successfully to their changing business needs and have reinforced long-term partnerships. Ongoing innovation in services Demands on businesses' IT are ever increasing. Each year, CIOs are expected to deliver more for less, including qualitative improvements such as improved agility and environmental efficiencies. A long-standing outsource partner will provide technical leadership with tailored advice and recommendations based on an intimate understanding of your business. Environmental requirements on businesses are being met by a new breed of energy-efficient data center which houses high-density, consolidated, virtualised environments. Capital constraints are contributing to the adoption of cloud-based services, with leading providers offering a range of utility-based Infrastructure-as-a-Service models. These can be integrated into existing, dedicated infrastructure environments, providing optimal flexibility to deliver as business priorities change. Better business Organisations in successful IT management outsourcing relationships have driven down costs, simplified IT operations, and improved the efficiency and effectiveness of their IT. They enjoy enduring partnerships based on flexible arrangements that continue to deliver business value and transformation on a daily basis – whatever challenges the business climate might deliver.