SPONSORED: Should MSPs offshore remote support?
Offshoring IT support staff may be cheaper, but leading MSPs we spoke to remain split on whether the offshoring model translates to the managed services space
As we explored in part one of this feature, MSPs are continuing to grapple with how much work to carry out remotely.
Of course, the ultimate extension of the remote support ideal is to carry out the work not from a remote service desk in Reading or Manchester, but from another country, which an increasing number of MSPs are doing.
Part two of this feature, which is in association with SolarWinds MSP, explores the pros and cons of offshoring or outsourcing remote support - an emotive topic that divides MSPs like no other.
According to the National Association of Software and Services Companies (Nasscom), the Indian offshore outsourcing industry directly employed nearly 3.5 million people as of 2016.
"We will tend to do two different cost models: one that is purely costed out of staff in the UK, and one that shows a mix of at least 80 per cent remote fix and with India in the equation. What we've found is that customers are actually wanting to talk to our team in India," JP Norman, Amicus ITS
The country is a popular destination for western software and IT services companies hunting cheap, skilled labour, with IBM, for instance, reportedly now employing more people in India than in its native US.
But it is not only giants like Big Blue that are getting in on the offshore trend, with smaller providers in the channel also drawing on low-cost regions such as India, eastern Europe and the Far East to deliver core IT support or software development functions at a cheaper cost.
Logicalis last year completed the offshoring of UK first and second-line support roles based in Cardiff and Slough to Cape Town. South Africa is also favoured by London-based MSP IT Lab, while SCC is in the process of building out an offshore presence in Vietnam.
The allure is obvious, with MSPs able to employ three IT support staff in India for the price of every one UK employee, according to JP Norman, director of technology, security and governance at Amicus ITS, a Southampton-based MSP whose network operations centre (NOC) is based in India.
Amicus ITS opted to offshore some remote support functions a decade ago, and settled on India following an extensive selection process. Amicus' Indian operation complements its Newcastle-based service desk by providing NOC services, as well as certain SOC, service desk support and change management support functions.
This puts remote support is at the heart of everything Amicus ITS does.
"Nearly 50 per cent of my organisation is now based out of India, providing support into the UK," Norman explained.
"Our service desk is driven to a target of at least 50 per cent remote fix with the remainder of the organisation in India on 100 per cent remote fix due to the nature of the business. As an organisation, remote fix allows us to not only run at lower costs overall but also that means we can translate that onto customers. The other advantages that you get from remote support is almost immediate customer satisfaction. Just imagine being able to call a helpdesk and speak to someone who, with your permission, can get onto you device and fix the problem you've got while sat on the phone talking to you."
Offshoring is an emotive topic, and high levels of customer dissatisfaction have prompted other sectors, such as banking, to return some support functions they'd previously offshored to the UK in recent years.
"Going offshore in the UK is a massive problem; you only have to look at the banks," Todd McQuilkin, Air-IT
Some MSPs are convinced that the offshore model translates badly into the IT services space, particularly among small business clients who want their IT partner to boast a physical presence close by.
Detractors of the offshore model include Todd McQuilkin, CEO of Nottingham-based MSP Air-IT, who declared himself "not a big fan" of MSPs relinquishing their core services components, whether that be to another company, or to an offshore arm.
Recent research by Service Leadership found that MSPs who outsource functions to a ‘master MSP' boast higher margins than similar counterparts, but McQuilkin argued that doing so could harm the MSP's reputation long term.
"If we outsource our core components then we are becoming a reseller of MSP services, and we are not fully fledged MSPs as we are losing control - especially if we go offshore," McQuilkin said.
"Going offshore in the UK is a massive problem; you only have to look at the banks. No disrespect, but taking it offshore with the foreign accents in Sri Lanka or India is a massive problem for our end users. For us, the customer experience is absolutely paramount, and if someone else is delivering that piece of the customer experience, then we have no control over it."
McQuilkin's reservations hold even when it comes to MSPs who own their own offshore arm.
"Most of the small-business MSPs or even enterprise MSPs - if you look at the Capitas and CGIs - they are not going offshore to do it. I know one MSP that has a service desk in Sri Lanka and their service desk manager has big problems with cultural integration into the business," he said. "They don't have the same values and the MSP is losing control of that piece of the customer experience they really need to be focused on."
Colin Blumenthal, managing director of Buckinghamshire-based MSP Complete IT, agreed.
"For us it's not something we'd entertain," he said.
"I believe it's detrimental to the relationship to have an offshore team working with our clients, who are predominantly SMEs. I believe that at the SME end, they want their helpdesk to be local to them and feel local at all times."
John Pepper, CEO of Milton Keynes-based MSP Managed 24/7 (pictured) held a similar view.
"We take a lot of pride in the fact deliver our services only from the UK, and that's our business model," he said.
Norman countered this by claiming that Amicus ITS' clients are tending to select packages that include an offshore delivery element when presented with a transparent choice.
The secret to the success of operating an offshore arm is strong communication, he asserted.
Amicus ITS' Indian team provides remote support to 32 per cent of the UK's 111 service, Norman claimed.
"It's an interesting view [from the other MSPs] - and an interesting sales pitch," he said.
"But what I can tell you is that in the last two years our Indian operation has gone from 23 to 46 or 47 individuals on the back of growth.
"We will tend to do two different cost models: one that is purely costed out of staff in the UK, and one that shows a mix of at least 80 per cent remote fix and with India in the equation. What we've found in the last year or so is that customers are actually wanting to talk to our team in India, as they appreciate they have these technical skills. Their command of the English language is very strong and once customers have elected to speak to them once, those relationships are started up and they are managed completely from India."
Amicus ITS has "daily scrums" with the operational leads in India over Skype and Skype for Business, and its two directors travel out to India for two weeks every three months, Norman said.
"I can guarantee you that the team in India feels as much a part of Amicus as the guys based in the head office, as well as the seven people that work only on a customer site," he said.
"I can understand where [Todd] is coming from with outsourcing some of your core services to another MSP, because you will dilute the relationship with the customers. That I can understand, but that's about strategy and growing pains for organisations. We find ourselves in a position where the Indian NOC is part of our organisation, part of our core - the customers recognise them as much as we do."
Offshoring comes in waves and is a "little bit like fashion", Norman concluded.
"Around the same time Amicus starting putting out feelers to India, there was that infamous scenario of BT outsourcing their contact centres, and there was uproar. That's the wrong way to do it. There is certainly a lot of business that should be conducted face to face, and there is value to that. But there is a groundswell [for offshoring] as a lot of people in a lot of roles can do them from almost anywhere they can get an internet connection."
This article was commissioned by SolarWinds MSP