Bevil Wood­ing

The hype around cloud-com­put­ing, a sur­feit of ser­vice provider op­tions, and the ever-present tar­get of re­duc­ing costs and im­prov­ing ef­fi­cien­cies; are all spurring on a trend in the world of cor­po­rate in­for­ma­tion tech­nol­o­gy (IT). It is the move to out­sourc­ing IT func­tions, pop­u­lar­ly re­ferred to as Man­aged IT Ser­vices.

With Man­aged IT Ser­vices, key ar­eas of an or­ga­ni­za­tion's IT in­fra­struc­ture and ser­vice de­liv­ery ca­pac­i­ty are out­sourced to an ex­ter­nal ven­dor, as op­posed to be­ing ful­filled by in-house staff or in-house re­sources. Un­der this arrange­ment, a Man­aged Ser­vices Provider, or MSP, ei­ther takes over a cer­tain area of an or­ga­ni­za­tion's IT func­tion full time or acts as a part-time sup­port re­source.

Man­aged Ser­vices is not a new con­cept. It bears close re­sem­blance to the out­sourc­ing craze of at the turn of the cen­tu­ry. What is dif­fer­ent this time is the way providers are be­ing em­pow­ered by web and mo­bile tech­nol­o­gy to struc­ture and present their of­fer­ings. Still, for all the hype, Man­aged Ser­vices may not be the so­lu­tion to every or­ga­ni­za­tions IT re­source con­strained needs. How­ev­er, they do present a par­tic­u­lar­ly ap­peal­ing mod­el small to medi­um sized en­ter­pris­es.

In-house IT staff eas­i­ly get bogged down deal­ing with im­por­tant but mun­dane and repet­i­tive tasks. These ac­tiv­i­ties can take up pre­cious time that could be bet­ter spent per­form­ing more high­er-val­ue du­ties like ca­pac­i­ty plan­ning, over­see­ing strate­gic ini­tia­tives that bring greater val­ue to the en­ter­prise.

MSPs of­fer to help by tak­ing spe­cif­ic IT bur­dens off of their clients and free­ing them to fo­cus on run­ning their busi­ness. Still, the de­ci­sion to move to man­aged IT ser­vices can be far from straight for­ward. There are pros and cons tak­ing your or­ga­ni­za­tion down the man­aged ser­vices road.

Some Ben­e­fits

More Fo­cused IT Teams: AN MSP can take over the rou­tine dai­ly tasks and al­low in­ter­nal IT de­part­ments to be more ef­fi­cient and strate­gic.

Man­aged Spend­ing: MSPs al­low IT de­part­ments to pay on­ly for what they need. This can free up vi­tal funds for oth­er projects and ini­tia­tives.

Ac­cess to Knowl­edge: Or­ga­ni­za­tions may not al­ways have the bud­get or full-time de­mand for an ex­pe­ri­enced pro­fes­sion­al in a giv­en area. An MSP can pro­vide ac­cess to knowl­edge on an on-de­mand ba­sis and can al­so help aug­ment in­ter­nal ca­pac­i­ty.

Po­ten­tial Draw­backs

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While the ben­e­fits of mov­ing an IT ser­vice to an ex­ter­nal ser­vices provider can be great, it can come at a price. There are many suc­cess sto­ries; but there are al­so many tales of fail­ures. Some po­ten­tial draw­backs in­clude:

In­ter­nal Re­sis­tance: IT pro­fes­sion­als can be quite ter­ri­to­r­i­al. If not care­ful­ly man­aged, an MSP can be re­ceived as a threat and in­ter­nal IT staff can put up pas­sive or ac­tive re­sis­tance to sur­ren­der­ing con­trol to a third par­ty.

In­creased Ad­min­is­tra­tive Bur­den: An MSP can in­ad­ver­tent­ly shift the in­ter­nal bur­den from tech­ni­cal ser­vices to ad­min­is­tra­tive re­spon­si­bil­i­ties. Small or­ga­ni­za­tions in par­tic­u­lar may have chal­lenges stay­ing on top of the ad­min­is­tra­tive re­quire­ments in­volved in main­tain­ing an MSP arrange­ment.

Prop­er Vet­ting: MSP can come in all shapes, sizes, price-ranges and de­liv­ery ca­pac­i­ty. The in­dus­try is still evolv­ing and, if you are not care­ful, it is as pos­si­ble to land a MSPs as it is to se­cure a good one. The onus is on the IT de­part­ment to do due dili­gence. It will be worth your while.

Down time, lost mon­ey, and un­hap­py cus­tomers can all be the scars of a failed man­aged ser­vices out­ing

Key Con­sid­er­a­tions

For ex­ec­u­tives con­tem­plat­ing out­sourc­ing IT ser­vices, there are some key con­sid­er­a­tions to make when for­mu­lat­ing an out­source strat­e­gy.

1. Start by look­ing with­in. Gain­ing a busi­ness view of in­ter­nal IT ser­vices can pro­vides in­valu­able in­sight in­to how IT is sup­port­ing the com­pa­ny and what op­por­tu­ni­ties avail­able for out­sourc­ing.

2.En­gage the team. Both busi­ness and IT lead­er­ship should be in­volved from the on­set when de­vel­op­ing an out­source strat­e­gy. Syn­chro­niz­ing the bot­tom-line and the tech­ni­cal van­tage points can be the crit­i­cal fac­tor in de­ter­min­ing where in­vest­ments should be made, and in as­sess­ing if and where out­sourc­ing makes sense.

3.To Thy Own Self Be True. Be sure to match hard fig­ures about IT spend and IT sav­ings against the more sub­jec­tive fac­tor of users and oth­er IT stake­hold­ers' opin­ions. An hon­est, ob­jec­tive as­sess­ment of where IT is suc­ceed­ing and where it is fail­ing with­in the or­ga­ni­za­tion must be sought and heed­ed.

4. Un­der­stand the Val­ue Propo­si­tion. How deeply will they have to be in­volved in our busi­ness? Which ar­eas will they be re­spon­si­ble for ser­vic­ing? How ex­act­ly will hav­ing them on board free up staff, save costs, or im­prove ef­fi­cien­cies? What will the ser­vice re­al­ly cost in terms of ad­min­is­tra­tive over­heads, busi­ness risks, loss of op­er­a­tional con­trol, and de­vel­op­ment of in­ter­nal ca­pac­i­ty?

5. Ex­ten­sion of Your Busi­ness. At the end of the day the out­sourc­ing arrange­ment has to ser­vice your needs. Find­ing a ven­dor who has both the tech­ni­cal com­pe­tence as well as the cul­tur­al fit is es­sen­tial to the ul­ti­mate suc­cess of any out­sourc­ing arrange­ment. Look for a ser­vice provider that is proac­tive and that can help you un­der­stand the re­al­i­ties of your busi­ness process­es and po­ten­tial.

Al­ways re­mem­ber, how­ev­er, that every so­lu­tion has the po­ten­tial to cre­ate a new set of prob­lems. An MSP does in­volve ced­ing a cer­tain lev­el of con­trol to an ex­ter­nal en­ti­ty. There­fore, ex­ec­u­tives and IT man­agers should first take an ob­jec­tive, con­sid­ered look at their re­sources, needs and goals. That is the best plat­form for mak­ing an in­formed de­ci­sion about whether or not mov­ing to man­aged IT ser­vices is best for your busi­ness.

Bevil Wood­ing is the Chief Knowl­edge Of­fice of Con­gress WBN (www.con­gress­wbn.org), a val­ues-based in­ter­na­tion­al non-prof­it. He is al­so Ex­ec­u­tive Di­rec­tor of Bright­Path Foun­da­tion, an ed­u­ca­tion-tech­nol­o­gy non-prof­it (www.bright­path­foun­da­tion.org). Fol­low on Twit­ter: @bevil­wood­ing or at: face­book.com/bevil­wood­ing or con­tact via email at tech­nol­o­gy­mat­ters@bright­path­foun­da­tion.org