by Allan R. Frazier, Marketing Director
Let me start by saying that the headline above is slightly misleading. Not every company should out-source its IT department. If your company has over 200 users you may be better off having an in-house IT department. But be prepared you’ll have to spend upwards of $100K per year in salaries and equipment.
That seems to be the real root of the challenge were discussing. When does the ROI of having an out-sourced IT department outweigh the difference of an in-house staff?
Out-sourcing your IT department is perfect for the SMB or Medium business owner. Why? I’ll list the reasons:
1.) Cost – Generally, depending on the size of your network, out-sourcing will be less expensive as you do not have to keep personnel on-site or various sites every day. The overall cost savings here would be in the thousands of dollars over the course of a year.
2.) Methods – Is your company having meetings to discuss ways that IT can reduce expenses within the company? If not, you should. The whole reason for having computers in the first place is to make things more efficient. Efficiency leads to good organization, effectiveness and cost savings. Out-sourced or in-house, methods should be found to reduce expense and increase efficiency with your IT equipment. Internetworking Technologies, Inc. is more than interested in providing you with the right solutions.
3.) Attention to detail – The thing about being an IT administrator is knowing every small detail within the network and knowing how and why they work. That level of expertise comes with experience in working with your network and you to understand what the user pain and problems are occurring within the network and your company then taking the action necessary to correct them. Again, Internetworking Technologies, Inc. is more than interested in providing you with the right solutions. INT provides prompt, personal attention to your needs. The same attention you would expect from an in-house administrator, only not as expensive.
Hire a Partner, Not Just a Provider:
Hiring an outsourcing service provider is not just a matter of the lowest price quoted or the highest savings promise proffered. Experienced outsourcers demand a lot from their partners, price being only part of the equation along with expertise, flexibility and a spectrum of other assets. In discussions with senior executives at Discussion Forums held in the spring of 2004, participants generally acknowledged that the so-called “soft issues” are often harder than the “hard issues” of pricing and contractual terms. “You can’t tell from a proposal what it is going to be like,” said one experienced outsourcer. “You are not allowed to put down ‘act of faith’ as a selection criterion. You have to fully understand the contractor’s culture, ethos and aims.” Another participant itemized the criteria his company used in its selection process: reputation, proven experience in business process outsourcing, excellence in the technology platform to be used; trust and cultural fit with top management; and, finally, price and quality. But he added, “On both deals I have worked on, we did not select the cheapest offer.”
3. It’s More Than a Contract, It’s a Business Relationship:
Contracts are clearly critical for aligning expectations and interdependent responsibilities at the outset of an outsourcing arrangement. Experienced outsourcers suggest that over time, the contract gives way to performance measurements and the relationship between the outsourcer and the service partner as key success factors. Discussions among American and European executives at Discussion Forums suggest that most companies follow a proven process in searching for, evaluating and selecting an outsourcing service provider. Initial research is typically followed by a formal Request for Information and then a Request for Proposal, culminating with negotiations, due diligence and then determination of contractual or commercial arrangements. What was clear from all participants, however, is that selecting an outsourcing partner is not your standard procurement exercise. As one participant put it, “I am buying into a journey and a route. I do not know exactly how I am going to get there, but I am confident that I will reach the destination, because of the cultural fit” between his company and the outsourcing service provider he chose.
