Most companies are dependent on information and communications technology (ICT) to operate effectively in today`s highly competitive environment. Big business has been reaping the benefits of purchasing ICT as a managed service for years.
Multinational manufacturers, retailers, mining groups and financial services companies have accepted that their core competencies are not the management of computers, networks and business applications. But what about the medium-sized business?
Business Connexion`s Pretoria regional chief executive, Isaac Mophatlane, says outsourcing ICT has nothing to do with company size. "If you`re in business, and you use ICT, you`ll be interested in lowering costs and improving the performance, reliability and availability of your business systems."
He notes that outsourcing ICT to an expert service provider has several benefits, which often directly support the strategies of medium-sized businesses.
"The ability to rapidly respond to changing market conditions or customer needs is often a major competitive advantage for the medium-sized business. Outsourcing ICT to a flexible service provider geared to support this agility - be it in terms of capacity that can scale to fluctuating needs, or services that can be adapted to changing requirements - is an obvious solution," Mophatlane explains.
Gert Cronj'e, Business Connexion`s Eastern Cape regional chief executive, continues: "If anything, outsourcing may even be more appropriate for medium-sized companies - allowing these organisations to focus on their core businesses while delivering levels of management, maintenance and availability that may not have been possible in-house," he says.
"The ability to compete effectively is a concern of every business - from the smallest start-up to the largest multinational corporation. ICT is increasingly being recognised as an enabler of competitiveness. As a result, almost all business owners are being compelled to examine how they use ICT to their advantage. Most find that effective ICT systems can be used to improve human productivity, increase the efficiency of business processes and provide better controls and visibility of operations," he explains.
"Outsourcing ICT to an expert service provider is a model that is well accepted by many large companies," says Phil Savides, Business Connexion`s Western Cape regional chief executive. "However, the perception that ICT outsourcing is only for large companies is simply not true.
"Cost is often top of mind for the medium-sized company," says Savides, "Using managed services in many instances drives costs down, but the other benefits should also be considered to get an accurate overall picture. Higher availability, better business continuity and the resilience associated with a professionally managed environment contribute to improved productivity and lowered risk - there is distinct additional value to be gained by outsourcing," he explains.
Savides notes that a company like Business Connexion has made significant investments in infrastructure, which allow it to cost-effectively extend world-class ICT services to companies of all sizes.
Sydney Ramutla, Business Connexion`s Johannesburg regional chief executive, notes that managed services offerings are designed to scale to match business needs. "A medium-sized organisation can effectively buy the ICT capacity it needs as opposed to investing in its own infrastructure, which it may not fully use all the time," he explains.
In addition, medium-sized organisations may not have access to the large budgets needed to research, develop and implement new solutions. Ramutla says outsourcing ICT to a specialist becomes a viable alternative that can deliver more value for money.
Skills shortages in the technology environment create further difficulties for the medium-sized company, says Ramutla. "Businesses of all sizes face the challenge of finding, recruiting and retaining skilled staff members who can help get maximum value from the ICT environments. When using a managed services provider, the medium sized-company can avoid this potentially crippling problem and benefit from access to a far wider range of skills," he explains, noting that as a national company with over 4 500 staff members, Business Connexion has a large pool of talent on which to call.
Business Connexion`s KwaZulu-Natal regional chief executive, Will Heygate, says: "The use of ICT is widespread in the KwaZulu-Natal mid-market space, but is not necessarily a differentiator in terms of the line of business."
This creates an ideal opportunity for such businesses to outsource their ICT requirements to a managed services provider. He explains: "In the insurance industry, for example, we`ve seen many companies that have expanded rapidly from perhaps 10 or 15 employees to 50 or 60. While any company would welcome such growth, the ICT environment tends to become something of a problem - sprawling, unreliable and difficult to maintain."
Notably, Heygate says outsourcing allows the medium-sized business to solve its complexity and reliability challenges without significant costs or taking on new staff. "With a managed services provider, companies are able to document the required levels of availability and reliability in their service level agreements, which ensures that ICT services are geared to deliver optimal value for spend."
There are also the benefits of improved resilience to business interruptions and access to contingency plans in the event of disasters. "Some elements of corporate governance relate directly to ICT, such as security, backups and business continuity measures. While each company may set certain parameters depending on their needs, ICT governance is inherent in every service we offer. Furthermore, ICT support and maintenance contracts ensure our clients are never left stranded when it comes to resolving problems," adds Cronj'e.
"This is where Business Connexion has a real competitive advantage, because our managed services models are designed to suit the business requirements of individual clients - no matter what their size," he concludes.
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