Outsourcing is nearly always an effective option

Baldwin: Outsourcing can prove effective when companies have their IT sorted out

Outsourcing can reduce capital and operational expenditure within a business. However, many companies have resisted the temptation to outsource their IT, concerned that the move will hamper their effectiveness. But never say ‘never’.

Right now service levels are key, as many of our customers, partners and peers are feeling the pressure from the current economic climate. Everyone is concerned about cutting budgets and supplier reviews. Service slip-ups are now simply unacceptable and internal efficiency drives can be bad for your customers.

Companies have worried about outsourcing in the past as they fear loss of control. However, this view is pretty outdated. Managed effectively, an IT department will seem no different, even better. The only worry should be ensuring it’s managed properly.

Outsourcing IT doesn’t mean your customer washes its hands of the IT department to then focus on other areas. The relationship you have as an outsourcer with your customer will define the quality of service you get. You get out of it what you put in. As an outsourcer, you should be an extension of your customer’s IT team.

Be wary of customers that try to outsource their IT problems, however. We think customers should fix their IT before engaging an outsourcer. Some things should remain in house. Customers should keep the accountability for their architecture in-house.

A business’ IT architecture outlines how things are done and has been designed to address specific needs. This is the one instance where we think your customer can safely say they won’t consider outsourcing.

Outsourcing doesn’t always mean moving things thousands of miles away. For the first-time outsourcer, whether to outsource on or offshore is more of an emotional decision than a business one. The perception that offshore is a cheap, poor-quality alternative is just not accurate. Centres of excellence being developed globally are providing cost-effective quality offerings. Yet there are many instances where near-shore is the only choice.

Service level agreements (SLAs) should be as tailored as possible. Don’t get tied into the traditional ‘five nines’ availability that continues to be a yardstick for too many people. This is something that we are talking to our customers about a lot.

Pay for top-notch service levels when they are needed. If a business has major peaks and lulls, the supplier should work with the customer to develop SLAs that reflect that. Your customer should only be paying for the availability required.

Customers may be nervous about handing a part of their business over to a third party, but they can quickly gain tangible efficiencies quickly.

Dave Baldwin is managing director at Getronics