Technological capability is one of the key internal functions that an organisation can use to leverage efficiencies, enablement and strategic advantage. Unfortunately, many not-for-profits find themselves overrun by just making existing systems work. This constraint can often lead to an inability to think innovatively as there is insufficient IT capability or capacity to drive change. Outsourcing the function be a smart and cost-effective way to overcome this hurdle and this blog will explain when and how an organisation can go about outsourcing certain elements of the IT function to enable growth and sustainability.
What is Outsourced IT?
Outsourced IT is the practice of subcontracting the management of the technology (computers, internet, infrastructure, servers etc…) function outside of an organisation. Whilst the organisation retains control of decision-making and direction, they are able to put I.T. in the hands of a service provider who is skilled, experienced and can leverage technology to implement and deliver comprehensive organsiation-wide IT systems.
This can be extremely beneficial for cost-savings, reducing downtime and maintaining up-to date-systems. All businesses, not-for-profits and even start ups can benefit from outsourced IT.
The management of computing and infrastructure is imperative for the modern organisation, yet it also remains a skills gap, which is why outsourcing IT is so valuable. An engagement with an IT service provider can be flexible to your situational business requirements, as you may only need assistance in a certain area such as Cloud Services, Infrastructure Management, long-term strategy formulation, or Support Services.
Why does this matter to me?
In the fast moving world of technology, the hierarchy of requirements is constantly changing; what start as ‘disruptive’ ideas and technologies soon become the norm within a couple of years (see: Cloud Computing). However at the base of every technology hierarchy is the requirement of a business to leverage technology to manage costs and create efficiencies.
As you move up the hierarchy, outsourced I.T. can begin to take a more active role in higher-order organisational outcomes. These can include enabling growth, creating competitive advantage, utilising or enhancing innovation and co-designing strategic imperatives and long-term plans that put organisations in a position to have sustainable technology in the long-term.
What should a Long-term Outsourced I.T Partnership look like?
Organisations often partner with IT service providers because they lack in-house capability to manage systems, operate a helpdesk, or they can’t keep up with demand. This makes it nearly impossible to also stay on top of planning and strategic direction for IT. To fulfill all of these responsibilities often requires a large IT department, who can operate across different planning horizons.
Horizon 1: ‘Fix This Now’
Short term helpdesk, infrastructure and risk management activities
Horizon 2: ‘Plan For Improvement’
Medium term planning to improve operations under the current constraints and investigating how to integrate relatively new but established technology to improve the current environment. This time horizon is reactive.
Horizon 3: ‘Long-Term Strategy’
Creation of a long term pro-active roadmap for what an organisation can be, rather than what it is currently. Very few organisations have the capability or the time for horizon 3 thinking which is why outsourced IT can be so valuable. An organisation can either engage a service provider such as humanIT to become a partner in horizon 3 thinking, or an external partner can be engaged to handle horizons 1 and 2, freeing up CIOs and executive teams to think strategically about IT at the third planning horizon.
Mid size organisations often leave the management of their systems to an I.T. team of three to four people, who only operate in fixing the ‘now’.
At it’s best, partnering can create significant efficiencies by utilising proven systems, experience in large-scale service provision and an ability to take a step back and provide perspective on a strategic vision for I.T. However where partnerships can fall down is when they are designed without a congruent purpose or without considering the wider effects that they will have on decision-making.
Three Key factors to ensuring effective outsourced IT Partnerships:
- Understand Your Business Model and Your Exact Requirements
- Most companies don’t have a true understanding of the costs of their I.T. environment, this includes the costs of downtime, general upkeep, server maintenance, salary, hardware and software purchase etc.
- It is essential to sure that the organisation has a full picture of what I.T. is costing now so that it can directly measure the ROI of outsourcing once it is implemented.
- Organisations looking to outsource must invest the time to understand themselves before engaging an external service provider. This ensures that it is clear as to exactly where they require the most assistance.
- Create a Relationship
- Co-develop management processes, regular communication processes and a KPI lead performance scorecard to ensure that the service being provided meets the standards of what is expected and agreed upon.
- Ensure that the organisation and the outsourced IT provider are in strategic alignment.
- Develop a vision and mission statement that can help communicate goals and objectives to lay the groundwork for a strong relationship that will create trust and buy in from decision-makers higher up
- Communicate
- Treat the outsourced IT provider that is chosen as an integral part of the organisation and its mission.
- Open up communication channels to relay the issues that the organisation faces and discuss key events, problems or successes related to technology.
- The IT services partner that is chosen will be invested in the outcomes and success of the organisation so treat them as a part of the team
So why should the IT function be outsourced?
Many organisations are starting to recognise that if they don’t have a significant internal capability in a particular organisational function (I.T., Finance, Legal etc...) then it is often simpler, cheaper and more productive to outsource that activity to specialists.
We have listed some of the additional benefits to taking the jump and outsourcing an IT function:
Cost-Effectiveness
- Most outsourced providers will offer all of their services for a fixed monthly or yearly fee.
- This provides complete visibility over exactly how much IT is costing and will allow accurate budgeting and forecasting which, as discussed earlier, is often relatively difficult.
Focus on Core Operations:
- Outsourced IT allows decision-makers to hand responsibility of daily operations outside of the organisation and re-focus the newly available human resources on mission-critical activities or longer-term strategic projects
- Identify where the organisation does not have core capabilities and then delegate the responsibilities to those who excel in that field
Leverage Your IT Capability
- Outsource the management of IT to allow the organisation to go from a small overworked team to fully functional and comprehensive IT systems and services
- This leveraged model may allow an organisation to close the capability gap with larger organisations and create a more reasonable playing field between the small and the large in the sector.
Human IT is a specialist IT services firm to the mid-market not for profit sector providing a range of services from cloud computing platforms that can transform productivity through to Managed IT Services encompassing risk management, IT infrastructure management, and 24/7 help desk services. Additionally humanIT regularly acts as a key strategic partner on the development of long term strategic planning for IT and this experience has reinforced humanIT’s belief in the power of outsourcing to enable an organisation to focus on maximizing social impact.
IF YOU ARE INTERESTED IN TALKING MORE TO OUR TEAM ABOUT YOUR STRATEGIC CHALLENGES AND HUMANIT'S POTENTIAL TO HELP YOU AT A STRATEGIC OR OUTSOURCING LEVEL THEN DON'T HESITATE TO GET IN TOUCH.
