IT Support: Insource or Outsource
All IT departments are today faced with a need to maintain and improve service levels, whilst managing and reducing costs.
One option facing an IT Head is to reduce IT Support costs by outsourcing operational systems to an IT Support Company or Managed Service Provider (“Outsourcer”). A range of options are available, from a labour broker supplying IT Support Specialists to a full transfer of the data centre to the Outsourcer premises.
The debate as to which is the better option has been raging for decades and is still unresolved.
Outsourcing versus Insourcing Considerations
For many years, the IT environment was limited to a few key focus areas. These areas included hardware, telecommunications and applications software. External connections were rare. However, we have seen a sea-change in IT in recent years. The Internet, malware, social media and other new application areas require an IT support organisation to have a much broader and deeper range of skills on board. What is incontestable is that with the move to customers having internet access to online systems and cloud computing, a loss of IT services to a business puts that business at serious risk.
IT departments have reacted in several ways, including outsourcing in whole or in part to IT Support Companies and IT Support Specialists. Some have a core support team, with new developments operating on a project basis, bringing in only those skills needed to complete the project and releasing them at the end. Some outsource basic support functions and retain a development capability. Some outsource everything to an IT Support Services organisation.
The usual prime driver is cost, expressed in reductions of operational cost, mitigation of risk costs in projects and in certainty of cost through fixed price projects with the it services company.
While outsourcing has its advantages, principally cost, insourcing has distinct advantages. Although more expensive, the business has better control over its IT resources. For example, having an IT Support Company carry out projects means potential project delays in having to deal with the management of a third party organization, rather than the project staff being directly supervised by the business itself.
A second advantage is improved customer satisfaction by keeping customer service inhouse. For example Call Centres, particularly those outsourced overseas, generally have a poor reputation. Speaking to someone locally who understands your business is welcomed by staff. Apple keep all their support services inhouse, and they say that is why they regularly top the charts in support quality reviews.
There is a great deal of hype in the IT community over “Cloud Computing”. With Cloud Computing the data centre moves to a service provider basis, in which all applications and data are supplied using Internet technologies. If you choose to implement public cloud computing, IT Support Services will be provided by an outsourced services provider. Private cloud computing can be either the internal IT department or an IT Services Company.
Making the Choice
Whether you choose outsourcing in total, or in part, the extent to which you outsource is a function of cost and company culture, and indeed whether you can outsource at all.
If you provide 24/7/365 mission-critical systems to an organisation, moving to outsourced IT Support Services on a remote site with all the associated potential risks may not be an option. Online shopping sites, airline reservation platforms and manufacturing planning systems are impossible or extremely difficult to replicate manually and prolonged downtime can put your business at risk.
For many organisations protection of data is of vital importance, and may even be a legal requirement. For example, lawyers may not take the security risk of having client case files hosted with external IT Support Services.
Intellectual Property (“IP”) protection can be a motivator. As an example, a pharmaceutical company will not want research data to be accessible from the Internet. Internal Email is certainly not something for public consumption.
You may still be able to outsource part of your IT function. For example IT Support Specialists can manage your in-house data centre and network infrastructure.
Choosing whether you do outsource, and the extent of your outsourcing depends on the type of business you are in, the criticality of keeping prying eyes away from your data and the budget available to support the migration.