Posted On: June 26, 2014

Pro Tips for Outsourcing IT

Running a business is a constant balancing act of trying to improve customer satisfaction and productivity, while saving time and cutting costs.  Over the past 30 years, one of the most common methods of achieving these business drivers has been outsourcing.  Companies that have successfully outsourced non-core parts of their businesses have enjoyed continually increased profits.  However, businesses that have outsourced poorly, in many cases, aren’t around anymore to talk about it.

When choosing what to outsource and where, one of the most important things for any business to grasp is what they can and should outsource and what they must keep in-house.  In a nutshell: keep your core.  Your core is that which you do better than anyone else.  It is what your customers come to you for.

If you are a business whose core does not directly involve your IT, chances are quite good that you’d be better served outsourcing it to a capable provider.  This has never been more true than today, with the advent of mobile computing, cloud computing, and IT managed services, which make it easier than ever to save time and money while further improving productivity and the bottom line.

Of course, just because these new technologies make it easier than ever to achieve the benefits of world-class IT, it doesn’t mean it’s not without risk.  To ensure a successful IT outsourcing solution, we suggest you keep the following tips in mind:

 

1. Understand why you are outsourcing your IT.

Before embarking on any new outsourcing initiative, make sure you fully understand what your drivers are and then validate them against the value proposition presented to you by your potential outsourcing provider to make sure they fit.

Of the 10 drivers of outsourcing, the drivers of IT outsourcing usually involve cutting costs, accessing resources not available internally, and improving performance. In the past few years, the best way to realize each of these drivers has been by moving the ERP to a cloud hosted environment that is tied to a provider that can deliver top quality IT managed services.

 

2. Understand why IT outsourcing fails.

The very things that drive companies to want to outsource their IT are often the same things that make IT outsourcing fail: lack of capability, lack of maturity, pricing, and staff augmentation.  Make sure you are not setting your IT outsourcing initiative up for failure by not fully understanding these hurdles and making sure they will not get in your way.

 

3. Choose what to outsource based on your objectives – not your problems.

When deciding what to outsource, it can help to think of IT as a value center, rather than a cost center.  This allows you to separate that which is key to your business from that which is generic and should thus be outsourced.  For example, if your main reason for outsourcing IT is to save money, then start with the applications that cost you the most money.  This may sound obvious, but IT tends to outsource the stuff it doesn’t want, rather than figuring out what makes sense for the business.

Cloud hosting and IT managed services are tailor-made to allow you to focus on your objectives. Furthermore, the nitty gritty of how the ERP is maintained is left up to your provider, leaving you more time to focus on more core problems in your organization.

 

4. Think of the bigger picture.

All too often, companies that outsource their IT get bogged down in details like terms and conditions or locking prices down rather than keeping the emphasis on helping the provider achieve the stated objectives.  Remember that your IT provider is becoming a part of your business and, as such, it should be treated as a partner.

Similarly, companies that outsource IT can often be short sighted when it comes to scalability and upgrades.  Always remember that, when it comes to IT, what you need today is different than what you will need five years from now. In some cases, it will be drastically different.  By moving to modern, cloud-based IT solutions, like ERP Hosting, and incorporating IT managed services, you will be setting yourself up for success down the road.