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INFOTECH: Outsourcing Your ICT - a Smart Financial Move
Recent Gauteng Business News
Until recently, outsourcing was considered the prerogative of larger
companies who engaged the services of external companies and specialists
to expertly manage their Information Communication Technology (ICT) and
other "back office" functions. However, this is changing. Both large
and smaller companies are fast realising the benefits from an
operational and financial perspective.
Over the years, organisations of all sizes have realised the benefits of
outsourcing and are increasingly opting for this model to provide their
ICT needs. As the realms of ICT keep increasing, it becomes less
cost-effective for smaller companies to employ full-time ICT specialists
so it makes sense for these companies to outsource their ICT
infrastructures and only pay for the services required. This way, they
have access to a wealth of knowledge and technical expertise which they
would never have had had they employed one or two people on their
permanent staff.
Managing ICT within a company, especially if the company's core business
is not necessarily IT-related, can be complicated, time consuming and
require the finance, resources and capacity that these businesses often
do not have.
A mistake many companies make is investing in the wrong technology,
which is an expensive exercise. A competent outsourcing service provider
will have invested substantially in technology - an investment that
need not be made by companies whose forte is not ICT. This leads to the
benefit of not having to factor equipment into capital expenditure but
rather it becomes an operational expense.
In addition to the initial outlay, there is the cost of support to also
consider. Removing the ICT management function from within a company can
free up time and budget, which can then be channelled into more
strategic activities.
Outsourcing also reduces the ICT headcount, thus reducing fixed costs in
the form of salaries; lowers the cost of hiring and training ICT
specialists and support staff; and cuts the ICT operating costs,
including those of equipment and disaster recovery plans.
Among the ICT services that can be outsourced are data centre operation,
desktop support, help desk services, network management, software
development and support, disaster recovery, web hosting and application
management. A company or organisation can opt to outsource either only
selected services or all of its ICT services.
Full outsourcing involves handing over complete control of the entire
ICT environment to an outsourcing provider, from the desktop to the
network through to connectivity. The client does not have to manage the
complex ICT infrastructure and places the implementation, maintenance
and control of the environment in the hands of a vendor.
The benefits of this scenario include significantly reduced IT cost,
access to a range of skills and resources, and reduced lead times when
implementing or maintaining, as the business only needs to deal with one
supplier.
The co-sourcing model involves having some internal capabilities and
resources and then outsourcing the rest of the IT environment. This may
be useful for organisations that have a certain level of skills but need
to bring in specialised resources for certain tasks, or for businesses
that have very specialised skills and wish to outsource the more
labour-intensive tasks such as desktop support.
Co-sourcing enables organisations to reduce head count in terms of
in-house IT resources, as well as better utilise skilled resources when
and where they are needed while the rest of the IT work is covered by an
outside vendor.
Managed services take place on the infrastructure side. The outsourcing
supplier will provide technical expertise in areas that are required to
be up, running and available at all times, such as data centres,
networking equipment, servers, backup and so on. The vendor will provide
24/7 monitoring of these environments and proactively fix problems to
prevent downtime.
This model is ideal for large enterprises that cannot afford downtime
and the risks and cost associated with it. There is also a cost saving
aspect as the company does not need to purchase and maintain expensive
monitoring equipment and software. There is a reduction in risk
resulting from downtime and access to specialised skills.
Hosted services may be Software as a Service (SaaS) or hosted hardware
services. This model offers a variety of services to businesses as a
hosted option, meaning that the organisation 'rents' the service from a
provider that has the infrastructure. This means that there is no need
for large capital outlay in order to take advantage of the services.
In handing over the management of any part of its ICT to an external
organisation, the client has two basic expectations - an increase in the
quality of services and a decrease in the costs connected to those
services. Outsourcing to the correct service provider offers this.
Business News Sector Tags: Infotech|