IT Brief NZ - Should you outsource your IT to a Managed Service Provider?

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Should you outsource your IT to a Managed Service Provider?

Running a business is a constant juggle between getting the work in, getting it done and getting paid for it. Even for businesses in the thick of the digital economy, the focus is about doing core business, not on IT.

That’s the view of Jodie Korber, from consulting, cloud infrastructure and outsourced IT services firm Lanrex, who says that once initial IT systems are set up, they often get looked at only when something goes wrong.

“While this approach is fine as long as the headcount stays within the designed limits of the system, its reactive nature means that little thought is given to how IT can be used to stay competitive over time,” Korber explains.

Whether it's competitive developments in the IT marketplace, or the growth of a business, there comes a point when a business needs to seriously look at its IT setup and make some calls about their 'next phase', she says.

“So the obvious questions are, how do you know when you're at that point, and what are the options available?”

Knowing when it's time to change
Stepping up to the next level of IT is a performance and competitive issue as much as a headcount one, Korber says. “The trick is being able to see whether you are suffering while you're 'living inside' your IT ecosystem,” she says. “Simply growing out of the designed system size (either with the number of users or locations), is one obvious pointer. “

Here are a few others, according to Korber:

·       Your IT is beginning to run slower, or slower than you'd like

·       You're getting complaints from staff (or even worse, from customers!)

·       You can't do things with your IT you'd like to be able to do

·       A competitor is doing things you can't match, or better

·       Problems occur that can’t be clearly explained

·       Security and redundancy aren't sitting with best practice or compliance

“As mentioned, it can be hard to tell whether you're ahead of or behind, but if you notice even one of these issues, chances are it'll need further looking at, and potentially an upgrade,” Korber adds.

So what are the options?

Keep things just as they are
“Holding out with what you've got is definitely the easiest and cheapest option,” says Korber. “If your business runs close to the line you'll always want to consider it.”

But do it for too long and those small recurring issues won't stay small, she says. A continually patched-up IT setup will eventually hold a business back.

“Simply adding on users, and then more users to an already-straining system makes it slower and more failure prone for everyone,” Korber says. “Over time, this 'technology debt’ takes the business further from its goals by being more costly to fix – in terms of up-front expense and opportunity cost.”

Korber says technology itself has become a key differentiator for many businesses. “And as it's being continually improved upon, the systems and applications that once made your business competitive may be the things holding it back only a few of years down the line,” she explains.

“If whoever's managing your current IT is spending most of their time just keeping things running, you can be pretty sure that this reactive approach is not helping your business get ahead.”

Staffing up internally
“If you already have internal IT staff, this might seem like a logical development,” says Korber. “The advantages are that the IT function stays in-house, with someone always close by, and there's someone there with history of the current setup.”

However, Korber says to take IT up to the next stage may require completely re-looking at the way things are. From the systems and procedures themselves, to the approach taken toward them.

“Then you've got to ask yourself whether the current team are right for that, or do they need some help,” Korber says.

“In all likelihood the latter will be the case,” she says. “New staff will need to be added, whose specialisations complement the ones you already have. Only then will you have the full suite of skills needed – from the day-to-day operations through to the strategic and pro-active thinking.”

In large companies with the critical mass to justify a full team working in-house, this is what would happen. However Korber says it’s a different question for growing SMEs; “Still at that awkward size where they need high-end IT in order to compete, but still find the cost (and the effort) of hiring prohibitive,” she says.

Outsourcing to an IT Managed Services provider
While staff mightn't work in-house, outsourcing IT functions can be the best solution, Korber says. “It gives access to the full suite of skills that keeps a business 'IT competitive', without having to foot the bill for a full-time team,” she explains.

Outsourcing also allows a business to draw on a managed service provider's experience. “They should be already delivering best practice solutions to real-world challenges, so would have developed a standardised set of processes and systems that can be fine-tuned for an individual business's needs, rather than having to build them from scratch.”

Korber says the right managed service provider should be able to evaluate a business’ IT needs based on its business goals, not just its current situation. “So they can build a system that'll make you competitive and keep you there even as your business develops,” she adds.

“And because they can deliver performance, security and stability to your business now and for the future, you can confidently focus on doing business.”

As for cost, outsourcing companies can work around a business’ needs, Korber says, whether the business would prefer the security and stability of a fixed monthly cost, or to pay by use. “Either way, the long-term costs of using an IT managed service provider's proactive approach will be lower than if your business had remained reactive,” she explains.

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