The current economic conditions make managing IT costs seem impossible. Businesses are faced with:
- Record low unemployment, making it difficult to hire the right skilled talent.
- Rising labor costs. With a scarce supply of talent, labor costs are growing at an exponential rate.
- The current generational workforce (Gen. Y & Z) are more demanding causing higher employee turnover.
- Technology changes so rapidly it is requiring increased training or hiring of the right skill sets.
- Cyber security threats are increasing by the day.
- If you are a small company of less than 50 employees, you can’t afford a large talented IT team, but still have the same needs and risks as a large business.
So how does an organization better control its IT costs, maybe even lower them, while still maintaining high levels of service and data protection?
The answer is simple, you take it off your plate of responsibility by outsourcing. Outsourcing of technology was typically a luxury afforded to multi-billion-dollar organizations to move their IT to lower labor markets overseas. However, many smaller companies, those of 500 employees or less can benefit greatly by outsourcing domestically and save approximately 15-28% a year in annual IT spending.
Technology has changed dramatically making it more efficient to manage domestically for what was once just a shift to a lower labor market like India or the Philippines. So why outsource at all if it can be more efficiently managed domestically and in-house? Ultimately, if you are not in a technology field, you still need it to run your operations. It has also become more complicated requiring people of different skill sets at different times and you can’t hire a fraction of a person nor have them available 24/7.
So why outsource IT? What are the benefits?
- In tight labor markets, like we are in now, it will be difficult to find the right qualified talent and retain them.
- You will either overpay for the right talent or not get the best talent for the job.
- In smaller companies (less than 100 employees), people in IT typically don’t have a solid career path and will eventually leave you for another opportunity.
- Businesses operate 24/7 and so should your support. An internal IT team does not have the bandwidth nor the breadth of experience to support your operations. You are also limited to the knowledge of those 1-3 people you hire internally.
Essentially outsourcing is really using a shared service concept. This provides tremendous value for the business depending how your outsourcing partner is managed. Some key things to look for in an outsourcing partner is:
- Domestic support – You want to make sure there is a cultural fit to your organization and your employees communication with the partner is reliable and frankly understandable.
- You have a primary team but they are supported by additional resources with your partner so you always have reliable service, but they still understand your business’s specific needs.
- The outsourcing partner operates a knowledge bank and security council which has a broad view of technology threats and solutions that your internal team would never see.
So how does this translate to savings and benefits to your organization? There’s a lot of cost savings potential that are not just technology costs. For example:
- Cost of hiring and employee turnover. This is significant and can be as much as 35% of the persons first year’s salary. Through outsourcing you eliminated this hiring need all together. It is off your plate!
- Technology licensing costs. A qualified outsourcing partner should provide you with visibility of all applications in use and compare your costs to other like businesses. They can also scale back on the number of licenses that are not necessary.
- Hardware procurement and replacement is more efficient and can gain economies of scale because your technology partner is purchasing equipment for multiple companies and has better buying power.
- Lower employee down time because you are supported by a team as opposed to relying upon an internal employee that will get around to your issue when they have time. Just hope they are not out on vacation.
- The cost of training staff is also off your plate. Also if you don’t train your internal IT staff, keeping them up on the latest developments, then what risks are you opening yourself up too?
Sagin provides 25/7 IT Managed Services domestically with either complete outsourcing or a partial/hybrid model. With high inflation, rising labor costs and scarcity of resources, why would you want to manage this function internally? We can provide you with a free benchmarking and assessment to see if outsourcing your IT is right for you. You can contact us at: firstname.lastname@example.org or +1.312.281.0290