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IT Outsourcing: What It Is and How It Works

  • October 14, 2016

What is IT outsourcing?

Every year, we talk to hundreds of companies and we often get asked to answer, “What is IT outsourcing? What exactly does it mean to outsource one’s IT services?” If you’re going to trust someone to manage such a critical part of your business, you need to understand what they are doing. This article will review the history, services, future, and common misconceptions regarding IT outsourcing. By the end, you will have a clear picture of what outsourced IT services entail and have the knowledge to decide whether or not they are right for your company.

“What we do for our clients is more than IT repair, it’s a partnership. It’s the outsourcing of a key business function because we work with them to make technology an enabler of their business versus just a tool.”—David Schafran (President of Transformation Strategies)

A brief history of outsourced IT services

In the early 90s, most IT companies responded to issues after they occurred and concentrated on remedial processes instead of preventive strategies. After some time, IT services providers developed systems enabling their staff to address the root cause of issues and cease their focus on resolving end-user symptoms. Technologies became streamlined and more affordable for small to mid-sized businesses by the mid-2000s and these developments provided managed service providers (MSP) with the tools to prevent and resolve issues before they caused business downtime and subsequent costs.

The innovation in the delivery of IT services changed the industry as the vendor’s profit became dependent upon the successful avoidance of problems instead of on their recurrence. Essentially, IT service providers have transitioned from using a break-fix approach, to proactive strategies and planning, which can help give your company the freedom and time to innovate without worrying about the health of your IT environment.

IT outsourcing services and features

Network Operations Center (NOC)

The network operations center (NOC) allows an IT services provider to monitor and maintain the client’s network via remote monitoring and management (RMM) software. NOC technicians supervise your infrastructure’s health, security, and capacity to measure the effectiveness of the network’s organization and processes. They offer suggestions for upgrades or adjustments when necessary, and ultimately oversee system troubleshooting, software, routers, and domain names.

Service Desk

The service desk focuses on managing end-user support and works with clients directly. A managed IT services provider should offer a service desk with 24/7/365 incident management capabilities for issues that may result in an interruption in the quality of your business’s operation.

Remote Monitoring

An MSP will remotely monitor your IT environment and receive alerts when problems arise. IT services providers are able to fix these issues before they inhibit the success of your company, often without you knowing there was an issue in the first place.

Proactive Approach

A managed IT services provider will work with your business to create a proactive strategy designed to avert issues before they occur. The preventive approach a managed IT services provider utilizes will reduce downtime and recurring setbacks that impede your organization’s workflow, and essentially, cost your business money.

Predictable Billing and Cost

The outdated, break-fix method of IT services required businesses to pay per incident the vendor resolved. Companies were unable to accurately predict their IT services budget when using the break-fix service because the cost was contingent upon the number of issues that surfaced, which varied over time. In contrast, proactive IT services providers charge a monthly, flat-rate fee with little fluctuation and few surprise expenses. Such services generally cost less than the pay-per-service billing method when considering the expenditures and revenue loss associated with downtime.

Vendor management

An outsourced IT services provider will be in charge of handling the support issues involved with the vendors that supply technology services to your company (Internet, hosted applications, hardware etc.). Outsourcing your IT department relieves your business of the inevitable responsibilities you incur when juggling multiple vendors and allows your employees to dedicate that time to business growth and profit.

Common misconceptions regarding IT outsourcing

Out of sight, out of mind

Businesses often assume if their IT services provider isn’t frequently on-site, they aren’t contributing to their operations. However, most MSPs are able to handle end-user issues remotely through the service desk, and in a shorter amount of time than it would take to get an IT tech in the car and to your location. The effectiveness of an MSP can be measured in the uptime and productivity of their clients’ employees. More on-site visits may suggest the provider is failing to deliver standard, remote monitoring support.

In-house IT is cheaper

IT experts who can fulfill all of your business’s needs are rare and expensive to retain. Most small to midsized businesses require a wide range of expertise to ensure their IT environment functions to its full capacity. The search for such a skilled individual is difficult in itself, but keeping someone so fluent in IT management on your staff is even more tenuous. A growth path for an IT expert is often lacking in businesses unrelated to IT, and they’re inclined to leave your organization for a better opportunity.
Finding a replacement will cost your company time and money, and it’s likely you’ll have to endure the same process again and again. In contrast, IT outsourcing companies have a plethora of growth opportunities for their tech savvy employees, which results in higher IT employee retention rates and enables the vendor to provide a skilled staff, stability, and a variety of IT resources suited to your business.

The future of outsourced IT services: It’s in the Cloud

The role of IT outsourcing in business is changing, but not disappearing. The cloud is becoming more popular, accessible, and stable, and many organizations are replacing their traditional file servers with ones that are Cloud-based. The benefit being, businesses no longer have to spend money on new servers, software, maintenance, upgrades, etc. However, if your company switches to the cloud, you will still need the support of your IT services provider to manage cloud vendors, servers, and applications, support end-users, and ensure your network infrastructure maintains connectivity.

Aldridge provides a diversity of resources and support to suit your business’s IT environment and ensures your organization operates as efficiently as possible. If you’re interested in learning more about what we offer, contact a firm representative today.

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