Is External IT Support the Way to Go?
One positive effect of the current recession is that it has produced some constructive thinking about money management. According to Ernst & Young’s Opportunities in adversity study, 82% of businesses say that “cash is now an issue.” CIOs, like their counterparts across the organization, are seeking ways to conserve cash, and perhaps this crisis intervention orientation will be the start of some longer-term shifts in attitudes, behaviors and trends. As the old adage goes, “Necessity is the mother of invention.” Recessions are very natural times for new attitudes, behaviors and trends to take hold, because “business as usual” is no longer working. They are times to reflect on lessons learned.
The recession is raising consciousness, for example, about just how much money is being spent on IT maintenance and support. As the role of IT has expanded within organizations, starting with pure data management, then moving on to information management, and then strategic knowledge management, maintenance and support costs have also expanded to consume a staggering 70% to 80% of IT budgets, according to Forrester Research. It’s not uncommon for companies to own a multitude of data centers and hundreds of servers.
One way to look at this problem is to simply acknowledge that this is the inevitable trend. But, the other way to look at it is that the cost-saving opportunity here is huge. There is no question about the fact that adopting a managed services approach can save the organization significant amounts of money, because you are giving over day-to-day maintenance and support responsibilities to a firm that can take advantage of the economies of scale that come with being in the business of managing technology for a multitude of organizations.
The transition to managed services has been understandably difficult for many organizations to embrace. First of all, it is big change, and change brings up the very natural and appropriate attention to risks. Are there security or privacy risks, for example?
As it goes with technology, however, continuous improvements have been made to ensure that the organization is not putting itself at risk with the transfer of IT maintenance and support to an outside partner. The solutions have been baked in to ensure that your data is perhaps even more secure with an outside vendor that provides managed services for a living. The risks have been addressed…and managed services should enable you to provide even more proactive and preventive support than can be provided internally. This is because, to be a player in the managed services business, a vendor must have state-of-the-art equipment, processes and practices, all across the board.
And think what you could do with the budget freed up for more strategic work. Your organization definitely needs to make the best use of the “I” in your “T,” but it does not need to have the “T” maintained and supported internally, at a cost that, almost invariably, far surpasses what can be provided by an external vendor. It’s the 21st century, and you now have a higher strategic calling. Your organization needs you to free up dollars to invest in strategic innovations that improve the financial position of your organization, better serve your customers and, if yours is a commercial enterprise, give you a differential advantage.
Tags: Information Technology, IT budget, it investment, managed services, recession, technology investment