Outsourcing elements of business functions is well accepted by big business, but IT managed services specialist, Business Connexion, says the benefits being enjoyed by large enterprises are well within the reach of medium-sized companies too.
According to Business Connexion`s Pretoria regional chief executive, Isaac Mophatlane, the size of the client company is immaterial when it comes to providing managed services. "Probably the most important point of managed services is that it is geared to solve the problems of companies in terms of skills, costs and technology requirements. If a company relies on IT and applications, which are not its core business, then managed services can deliver value," he says.
Phil Savides, Business Connexion`s Western Cape regional chief executive, agrees. "Companies across all industries in the Western Cape are increasingly outsourcing IT requirements to specialists as they start to appreciate the benefits of this model. Our clients in the Western Cape range from large multinationals to small manufacturing, distribution and services organisations."
In the past 12 months, Savides says his office has secured seven new clients, while adding further services to the portfolios of five existing clients. "We`re finding that it`s not a question of business size, but rather business maturity. Companies that have a greater focus on their core businesses, those that have more complex IT requirements and those with more competitors are realising that they need to be better at what they do. Part of that is being sure that their IT needs are being met more cost-effectively and with greater efficiency - and that`s when they look to us for assistance," he says.
Business Connexion`s Eastern Cape regional chief executive, Gert Cronj'e, explains that the company is able to leverage a shared skills base and its substantial investment in infrastructure to create economies of scale that directly benefit its clients. "Most importantly, since our services meet the highest international standards, our clients are secure in the knowledge that IT governance and best practices are built into every managed services contract," he says.
"With cost at the centre of the buying decision for most companies, the concept of outsourcing has immediate appeal since it offers the advantages of eliminating capital expenditure and translating IT spend into an operational expense. "It also allows companies to rapidly respond to new business requirements supported by technology - it becomes the responsibility of the service provider to deliver on the needs," says Cronj'e.
Will Heygate, regional chief executive of the company`s KwaZulu-Natal operation, notes that the IT needs of each client are likely to differ. As such, careful evaluation is necessary to determine appropriate solutions. "We have to ensure that there is a close strategic fit between IT systems and our clients` requirements. This ensures that the mission-critical elements are appropriately geared in terms of reliability and availability, while other components are supported according to their importance to the organisation. In this way clients receive optimal value from their IT spend," he explains.
Heygate says the mid-market space in his region is characterised by companies competing predominantly in the manufacturing, financial services and retail sectors. "Many of these companies have grown from entrepreneurial initiatives and are now operating in IT environments that are complex and difficult to manage. As they do not necessarily have dedicated IT departments, there is considerable potential for them to benefit from managed IT services."
Business Connexion`s Johannesburg regional chief executive, Sydney Ramutla, believes that the growing IT requirements of companies lead to a greater need for skilled IT resources. "By engaging with a managed services provider, businesses gain the benefit of dealing with a company that has the capacity to handle immediate needs and provide continuity of service going forward under a managed contract," he says.
One of the most attractive benefits of outsourcing IT is the ability to address fluctuating demand in unpredictable business environments. "When IT is provided as a managed service, clients can access the resources they need to address peaks in demand and easily scale back in recessive times. Achieving this level of agility is more challenging when companies own and manage their infrastructure," Ramutla says.
In addition, the technology industry is characterised by rapid advances and changes, which can render new equipment obsolete within months of purchase. Mophatlane says Business Connexion`s managed services clients are never faced with this potential problem. "The question of staying current with IT developments is our responsibility. As a market leader, we continually research trends and advances, and put these to the best use for our clients. They never need concern themselves with capital expenditure or the risk of buying technology that may lose relevance in a short space of time," he explains.
Mophatlane concludes: "Companies of any size focusing on their core revenue-generating competencies, while leaving peripheral services in the hands of experts, can benefit from greater service levels and often, reduced cost. Simply put, outsourcing IT is an opportunity for medium-sized companies to gain the benefits that have been enjoyed by big business for some time."
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