There are lots people looking at outsourcing these days as a potential cost cutter. Let me say right up front that, more often than not, outsourcing wont save you a significant amount of money. More likely, what you will get is more value for the dollars spent.
Those that are back office functions are probably the ones that are good candidates for outsourcing. Those that are strategic are ones that you want to give more time and resources. Even the strategic projects may have an element of outsourcing if you look closely at what items are one shot tasks and which are on going.
In this article were going to focus primarily on IT infrastructure management and maintenance. The development of applications can be outsourced as well, but if youre developing applications, they are most likely competitive differentiators and youll want to keep them close. If you happen to be developing an application that doesnt provide competitive advantage youd best look and see if its worth doing at all.
When you start looking at IT infrastructure outsourcing you need to know that there is a continuum of services that range from very little outsourcing to lots of outsourcing. There are three broad categories of outsourcing are:
Each of these categories has both positive and negative aspects and each should be considered when deciding on what outsourcing model works best for your organization.
This category of outsourcing is probably the least costly because what youre paying for is remote expertise. You get the experts sitting off-site providing capability that you dont have. In this environment, your partner will have connections to your in-house systems. They can monitor and manage the systems as if they were located in your office. The great thing about this model is you dont have to hire the specialist you may need only occasionally. The cost of that expert is spread across multiple clients and youre only paying for a tiny portion of the cost. The down side is you may not get quite the same level of response to requests for service that you might with a dedicated person. That can be mitigated by negotiating a service level agreement (SLA) that provides for the response time you believe you need and can afford. You also dont get some of the security of having your servers sitting in a hardened data center in the event of a disaster.