What's The Business Value In Outsourcing IT?

What's The Business Value In Outsourcing IT?

By Michaela Scampoli

You walk into work - early, of course - and turn on the lights. You pick up the morning mail, then efficiently file the junk mail in the recycle bin. Today’s the last Thursday of the month: time to deal with payroll.

With each of those actions, you likely used an outsourced service:

  • Lights: Your power company generated electricity elsewhere, then delivered it to your building over the vast network of power lines.
  • Mail: The Post Office delivered your letters and packages.
  • Recycling: A service typically provided cleaning, recycling, and waste removal services.
  • Payroll: A payroll specialist may provide the expertise you need to make sure your organization complies with payroll - and, more precisely, payroll tax - laws.

You may not ever think of some of these as outsourcing. That’s likely because the “disruptions” occurred long ago. In the U.S., electrical power outsourcing started in the 1880s. And the Second Continental Congress created the Post Office Department in 1775. (Yes, that’s right, the predecessor to the modern mail system was created before the formal Declaration of Independence was signed. Mail first, revolution later.)

Of course, your organization could perform each of these tasks. You could go “off-grid”, deliver packages, carry your bin to the recycling center, and process payroll yourself. You could. But you’d be smarter not to.

Each of the above services shares something in common: they’re an essential part of operations, but probably not mentioned in your strategic plan. That’s exactly why a smart executive relies on a provider to deliver the service.

To put it another way, you absolutely need these things to work. If trash or recycling removal stopped, your workplace becomes unpleasant quickly. Without mail…well, you’d be stuck emailing…which, if you were without power, you couldn’t do. Stop payroll and few people would come to work.

The same is true of your technology. You need it to work. Watch what happens when the internet goes down. Or when a laptop drops. Or when someone accidentally deletes important client files. You need systems and support in place to fix the problem and restore things to a working condition.

Your organization gains several things when you rely on a vendor to deliver a service.

You gain the cost benefits of scale. Your organization gets the benefits of centralization and automation. Without it, you either pay more or must use less sophisticated systems. Just as the power company provides electricity at a lower cost it would take for you to set up an on-site generator and battery system, a tech provider can support hundreds - or thousands - of systems at a lower cost than on-site staff.

Your staff - maybe even your IT staff - also gain the benefit of time. For example, if you rely on a provider for disaster recovery, backup and monitoring, your team no longer has to spend time on those tasks.

You also benefit from a provider’s focus. Tech staff on payroll are sometimes pulled onto, let’s say, a less than essential project (e.g., the infamous vice-president that just “needs a little support” for a personal pet project). IT providers are less likely to be pulled off-task without appropriate management approvals.

Finally, you gain access to expertise. Just as a payroll firm must stay up-to-date on tax laws, a tech provider must stay up-to-date on effective solutions. For example, your tech provider can test many backup solutions and help you select one that works - and one that will help you comply with laws, such as HIPAA.

Outsourcing your information technology services today might seem “innovative” or “disruptive”. But in the long run, the decision to outsource I.T. will look like the decision to outsource power, mail delivery, cleaning, or payroll. It will just be how most companies get things done.

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