Next year, 81% of Belux companies will spend the same proportion or more of their budget on IT outsourcing.. A checklist can help you determine whether or not your company is ready to outsource all or part of its IT department to a service provider.
1. Why are you considering outsourcing?
What do you want to achieve by outsourcing your IT? Do you want to reduce costs? Do you want to free up staff to focus on your company's core activities? Or are you looking for a way to stem the outflow of technically qualified employees now that the economy is growing? Are your aims clear and comprehensible to third parties?
As soon as you have a clear aim, you can start to define your needs.
2. Which part of your company do you want to outsource?
What do you want to outsource? Hardware? Ancillary help desk tasks? Email? Document management? Your entire IT department? And how complex is the project you wish to outsource? What percentage of the knowledge required do you have in-house? Once you have a clear picture of your needs, you can move on to the next step:
3. Make a cost-benefit analysis
Which department in the company will pay the cost of the outsourcing? Is there an approved budget for outsourcing?
Map out clearly the costs of your current IT infrastructure and employees. Compare this with the potential outsourcing costs and try not to overlook any costs. There are always more hidden costs involved in an outsourcing project than you would expect. Some examples:
- Travel and communication costs can quickly add up because the provider's employees are not sitting inside your buildings.
- The dynamics of your company, department or project determine the level of flexibility required. The more dynamic the mentality, the more likely it is that unplanned developments will occur during the term of the contract. For internal employees, this doesn't matter: their salary costs stay the same, even if plans change. However, in an outsourcing contract, a change of plans often means additional costs.
There are other benefits that you would not immediately think of, such as extra floorspace available in the company building and a lower energy bill. It may be a good idea to involve different departments in the detailed analysis so as not to overlook any expenses or potential gains.
4. Prepare a risk analysis
Outsourcing is associated with reduced costs and improved efficiency. However, remember that outsourcing can also impact your operations and personnel. Clear internal communication is required to ensure the process runs smoothly. In addition, someone must assume responsibility for managing the outsourcing process and dealing with problems along the way. Change management and transition management are the keywords here.
5. Is outsourcing technically feasible?
Is outsourcing technically feasible at your company or in your department? How closely are the different applications and services connected? Can you split the IT department, or part of it, off from the company? How is security managed?
6. How old is your current IT infrastructure?
The extent to which your IT infrastructure is up-to-date with recent developments can influence your decision on what to outsource. If you outsource, this will almost certainly result in a hybrid cloud scenario. Is your IT infrastructure flexible enough to live with this?
When outsourcing, you probably expect and will receive a better level of service than you can currently offer internally. However, good service providers are also up-to-date with the latest technologies and use the most modern equipment and applications. Therefore, you should expect that you may need to invest in your infrastructure to be able to achieve the desired level of service. That way, you avoid discussions after the event about hidden costs. Are you prepared to let go of it all and treat IT as you do electricity? How it reaches you is irrelevant, it's just there.
7. Is outsourcing organizationally feasible?
Are your processes and procedures clearly written down? Can you decouple individual processes? Are they understandable to an external partner? If your external partner doesn't understand your processes, it will be impossible for them to deliver the results you expect. Your service provider and your company must be on the same page in terms of expectations. This requires good quality IT governance. Someone must keep an objective overview of what each party wants and is capable of. Current trends also show that companies that outsource are no longer committed to a single service provider. Their projects, costs and risks are sometimes spread across multiple providers, each with their own specialization. A situation that lends itself to a SIAM approach (Service Integration and Management). In short, you first need to ensure that your own organizational affairs are in order before you initiate an outsourcing project.
The decision to enlist a service provider as a business enabler and strategic partner is not one that you can make overnight. You may need to hire specialists to help find the answers to the questions above - which is itself another a form of outsourcing.
Ask yourself whether you are satisfied with the way in which the IT needs of your company are met. Maybe outsourcing is the solution you need to enable you to give a resounding "yes" in answer to this question in the future.
Want to learn more about IT outsourcing? If so, contact Jo Leemans, Sales & Governance Manager IT Outsourcing RealDolmen.
This blog post is the fourth in a biweekly series of eight about IT outsourcing.
Want to learn more about IT outsourcing? Read also our other ITO blog posts:
Disruption is a fact: use IT outsourcing to reinforce your company's ability to change
You know the cost of IT outsourcing, but do you know its value?
Business continuity is the basis of every healthy company
In-house technology management is shifting to usage-base IT management. Are you ready for this? A checklist.
The cloud: the final hurdle on your way to IT Outsourcing?
If you want something done right, do it yourself - or maybe not?