Is IT Outsourcing the Third Professional Service?
Article date: Thu, 22 Dec 2011 16:49 GMT
A need for expertise, flexibility and cost-effectiveness is driving many businesses to outsource their IT in much the same way as they treat legal and financial services.
According to a panel of business and outsourcing experts, the trend suggests technology has become the third professional service and is spawning the creation of thousands of IT consultancies hoping to take advantage of the latest approach to managing IT.
Ian Hudson, founder of IT consultancy firm Hudson Hill, told the panel: "In our business we outsource the accounts function and it works tremendously well. It had become beyond our area of expertise, given that we were dealing with hundreds of thousands of transactions per month. It reached that problem point where we didn't want to hire a full-time finance director and a full-time bookkeeper and a finance manager but I did need that kind if resource less permanently."
Gary Dodson, director of Greenlight Computers said: "When you discuss it like that, it begs the question, 'has IT made it to being the third profession?' You apply the same rules to it as you do with the finance function and the legal function, therefore outsourcing IT becomes natural in the way that it is for legal and financial services."
Steve Hope of Sunrise IT believes the main driver for businesses to outsource their IT is a lack in the specialist skills needed in-house. He said: "The need for expertise is, I think, a key point when it comes to outsourcing IT. A lot of firms want to focus their IT resource on the things they do best such as developing apps that support the business for example rather than looking after operating systems and data centre provision."
Jonathan Bowers, communications director at hosting firm UKFast agrees. "Successful IT outsourcing is about the quality of services you can gain from a company that understands your business and can apply this to free up your resource and time."
Hope and Dodson also pointed out that it's common for businesses to outsource their IT temporarily - a factor that differentiates it from legal and financial services.
Hope said: "Growth is another key trigger for outsourcing or a physical move can force it to happen. I've dealt with a company recently that was relocating to bigger premises so they chose to outsource their IT while that move took place. They want to know that their IT needs can continue uninterrupted and that it is completely resilient."
Dodson continued: "Every client has reasons for doing things differently. You have to look at the business plan and relate IT to that plan rather than making the decision to outsource or stay in-house in isolation. A business that is trying to grow will need to make a different set of decisions, for a static business, the decision is easier. A shrinking business might move to a technology for a period of time in order to cut deep but then recover later.
"IT needs to follow the business plan and, because business plans change, it's not a decision that firms will only make once."
The panel identified a rise in the number of new IT consultancies offering their services to firms considering outsourcing. The experts recommended that businesses shop around for independent advice and understand their reasons for considering outsourcing before making a decision.
Dodson said: "It's not a case of spending lots of money on a consultant, it's just about finding someone you can trust who can bridge the gap between IT and the senior directors who don't understand it."
Hudson added: "Understand why you're outsourcing - is it to limit risk, to save money or for better expertise? They are the drivers that business owners should be looking at."
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