Knowledge

Executive Brief: Key Drivers for IT Outsourcing – Reasons, Risk and Rewards

As new business models are embedding IT more deeply into the business, today’s Chief Information Officer plays an increasingly critical role in aligning a company’s short-termand long-term IT strategiesand investments with vital business objectives. Their choices today will drive future growth, accelerate enterprise performance and transform how people work.

Please note, this executive brief on the key drivers for  infrastructure and application outsouricng is an abbreviated version of the original. For the full version, please view the Executive Brief:  Information Technology Outsourcing – Reasons, Risk and Rewards (PDF).

The Outsourcing Decision

Soaring capital expenditures, budget constraints, and the growing pace of technology change can make maintaining and expanding on-premise IT services less attractive. With these and other challenges, IT infrastructure and application outsourcing becomes an alternative that more and more organizations are choosing.

Key Drivers for ITO

Every organization has a different set of requirements and expectations when outsourcing all or parts of their IT/IS infrastructure and functions. Some CIOs take a tactical approach of strategic application and infrastructure outsourcing to achieve more effective global operations or speed time to market. Others decide on a complete ITO option as an opportunity to transform and re-engineer their technology and processes for greater effectiveness and agility.

Cost Management

Strategic outsourcing can deliver savings and a reduced total cost of ownership (TCO) for the organization in a number of ways.

• Capital expenditures can be reduced and costs can be lowered. Outsourcing providers make capital investments in hardware and equipment and share those cost across multiple customers. This translates into a lower cost based on significant economies of scale and allows their clients to reallocate those dollars to core business needs.
• Outsourcing allows the costs associated with IT to shift from the capital expenditure (capex) budget to the operational expense (opex) budget, financially positioning IT as an essential cost of doing business alongside other core costs of sales.
• Outsourced partners offer a way to reduce daily operational costs. The best providers allow companies to scale IT operations, so they can control how much is spent in high or low times.
• A business can leverage provider Service Level Agreements (SLA) to ensure that IT infrastructure and application availability, performance, and support sync with business objectives.

High Performance

While cutting costs is usually near the top of every ITO wish list, there are a myriad of other benefits to be gained by partnering with an outsourcing provider.

• Outsourcing providers can manage the day-to-day IT tasks, and “free up” corporate IT professionals who need to focus on higher value responsibilities. The ultimate benefit for many CIOs is the ability to focus their own internal IT resources on key strategic initiatives that positively impact the future of the business.
• Companies often need “speed to market” and the ability to respond quickly to opportunities. Outsourcing providers offer fast provisioning and IT support and agility to implement or upgrade applications quickly and securely, or to launch a product, especially when a separation is required between internal and external IT functions.
• The peaks and valleys of business activity can add some uncertainty and inconsistency to operations. Outsourcing providers can reduce risk by offering scalable resources and reliable performance for business continuity.
• Businesses adapting to the changing global business environment often have need for time-sensitive IT separation, integration, consolidation and transformation. A reliable outsourcing provider will know how to handle the IT challenges during mergers, acquisitions, and divestitures to maximize value and minimize risk.
• Outsourcing can be used for quality improvement because providers offer best-of-breed processes, people and technology.
• A business can leverage provider Service Level Agreements (SLA) to ensure that IT infrastructure and application availability, performance, and support sync with business objectives.

Access to Skills & Technology

Access to the technology and skills needed to support business objectives is often a critical factor in the decision to outsource. CIOs can tap the IT expertise and knowledge of their outsourcing partners.

• Providers have senior enterprise and solution architects, as well as senior project and technical experts who can help design solutions and guide IT projects and operations. They also can solve technical and end-user issues through 24-7 help desk and support.
• Instead of struggling to find, train and retain specialized IT talent, businesses can tap a broad pool of highly skilled IT specialists who can allocate their knowledge and skills to support the businesses, as needed.
• Outsourcing providers will assign well-qualified individuals to manage client accounts with a single point of contact and multiple service teams made up of highly skilled technical individuals.
• Outsourcing providers come with investments already in place. The best providers already have the latest technologies, processes and tools. Their clients benefit from a continuous investment and improvement model and focus on innovation.
• IT outsourcing can lay a foundation to help organizations move away from complex and inefficient IT environments and create IT capabilities that are scalable, agile, secure and responsive to business needs.

Secure-24 IT Outsourcing

Secure-24 is positioned to help organizations maximize the business value of their IT investments and lay a foundation for high performance with a wide range of IT operations, infrastructure and application outsourcing services: