Outsource used to be a dirty word.
Many younger executives often don’t know that outsourced services—or subcontracting—were once an indiscretion that occurred mostly in poorly managed companies. The average CEO today, though, probably remembers outsourcing as a taboo practice.
Today, any successful organization has built relationships with other best-in-breed companies to support functions that are unrelated to their core business but nevertheless critical to their success. Payroll and HR are two primary examples of services most companies farm out to specialists.
Another service that companies are choosing to outsource is information technology. But why?
After thousands of conversations with CEOs and other executives at growing businesses, we have identified five main reasons why executives choose to outsource I.T. to managed I.T. service providers (MSPs):
1. Predictable budget
Working with an MSP, you’ll have a better hold on your budget and assets. You won’t experience the big swings or surprises of an internal I.T. department. Think about what happened the last time a member of your I.T. staff left (which may not be uncommon, as an I.T. professional’s tenure is under 3 years on average). You had to create a budget for recruitment and training, and maybe even a higher salary or benefits to attract good candidates. And even if no one leaves, having your I.T. department contract an outside expert for “project” work can also create an I.T. budget overrun. Working with a MSP means you’re no longer at the mercy of fluctuations with I.T. staff or salaries.
Partnering with a MSP also helps you avoid any surprises when it comes to your actual I.T. infrastructure. You’ll have a clear understanding of the lifespan of your hardware and software, and can budget accordingly.
Not only are you benefiting from a predictable budget, you’ll also get a whole team of experts when you partner with a proficient MSP:
- At the top of the list of I.T. specialists on your new team is the vCIO. A virtual chief information officer handles and oversees all inner workings of your I.T. infrastructure. He or she understands how your business works and ensures that your technology aligns to improve your business processes.
- Another virtual C-level is the vCSO, or Virtual Chief Security Officer. Few companies can afford the $225K average annual salary of a chief security officer—but any business in an audited industry or with regulatory compliance requirements should have a C-level leader responsible for the organization’s security. A vCSO—virtual CSO—helps reduce your company’s risk to a possible breach and approaches I.T. security and compliance with an executive’s mindset rather than a purely technical approach.
- A host of onsite support engineers with varied technical certifications are a scalable resource that easily beats the average two-member inside I.T. team who tend to spend most of their time on reactive issues. Credentialed engineers are able to resolve any potential or current I.T. issues quickly. Best-in-class MSPs offer service level agreements (SLAs) to guarantee how quickly engineers will be onsite to address specific issues.
- Finally, another group of engineers who staff a 24/7/365 help desk. These remote technicians handle routine requests—password changes, data recovery, Microsoft Office questions—and are available around the clock. Pro tip: Find a MSP with a U.S.-based help desk team and a SOC-certified network operations center (NOC).
From the executive-level support at the top of the list to the straight I.T. coverage at the bottom, a capable MSP will serve your C-suite and end users.
2. Improving your company’s focus
We often hear from clients that they didn’t become a CEO, President, or CFO to manage an I.T. department.
Chances are, you’re right at the edge of a generation that had to learn about technology as it developed, whereas younger generations grow up learning about new technologies and use them fluently. When we speak with the average CXO, we know he or she didn’t go to college to learn how to manage a server or transfer data to the cloud. They want to be running their business, not the technology behind it.
I.T. is daunting to understand, and the ever-evolving nature of I.T. exacerbates that feeling! Trust us, we get it. There’s nothing wrong with not wanting to oversee or manage an I.T. department. The focus of your company was not to be the jack-of-all-trades, but rather an expert in your specific industry. Companies that outsource their I.T. can focus on their business strategies and their unique value proposition.
3. Handing over the risk
Perhaps one of the most stress-relieving benefits to outsourcing your I.T. could be sanded down to mitigating your risk. Since you’re working with an expert technology provider, you can expect that they will be equipped to make sure you’re complying with industry standards and regulations.
With rampant cyberattacks and information security failures, the I.T. world is no longer for the faint of heart or those with just a basic I.T. knowledge. If you were to suffer an attack like Equifax or lose confidential information through the I.T. vortex, what would that mean for your business? It could shut your doors. So why take the risk? Why not partner with a risk expert?
4. Staying above your competition
The fact that I.T. is ever-evolving is great for techies, but a headache for anyone operating a business trying to stay in the front of the race. Most companies don’t have the budget to hire a panel of I.T. experts, but when you outsource, you get that available to you 24/7/365 and with the dial of a number.
Outsourcing your I.T. helps you stay competitive. You’re taking out the guess work for where you ought to be within your industry, and you’re left feeling confident that you are the benchmark that developing companies aspire to.
A client recently told NetGain that “the nature of business for manufacturers is cutthroat competition, which makes efficiency everything….” He also shared that his executive team “found that many of our technology issues arose overnight or during the weekend. We would come in on Monday to find problems with business systems and transactions. Consequently, we would have to fix these errors manually to catch everything back up.” They ended up reallocating their internal I.T. guy to work on core software development, and entrusting their network management to NetGain’s managed I.T. program. Now, the executive tells us he never loses sleep over the weekends.
5. Business Growth
With all that money and time saved, your company can begin to allocate those resources to other products or processes that can help grow your business. Not to mention, with all the up-time you’ll have, you’ll be getting ever more financial benefits. Beyond the resource re-focus, your time will also be freed up from having to deal with any I.T. issues or downtime. Think about how much time you or your employees lose while programs are slowly loading or turning on. What would be a better use of your time?
Another client shared how much time his company has saved since switching to managed I.T. services: “The help desk feature continues to save our employees time and headaches when problems arise. Personally, I would say that it’s saved myself anywhere from two to five hours a week, and will save us money long-term.”
So, what’s holding you back on outsourcing your company’s I.T.? Are you curious about it, but worried about the ease of transition? We get it. Really. Trusting that you’re working with a world-class MSP will allow for ease of mind when thinking about converting to a new business model.
Does an MSP sound right for your business? Contact NetGain today to learn how we can help you succeed!
Editor’s Note: This post was originally published in July of 2013 and has since been updated for accuracy and relevance.