One of the most enduring challenges of ICT in business is the speed with which technology develops and the possibility of finding your business on the wrong side of this pace. This is especially significant for the SME sector.
The classic conundrum that businesses, of all sizes, find themselves in is the advent of a new piece of technology that promises to generate a competitive advantage of some kind.
The truth of the matter is that technology does not deliver competitive advantage – it should facilitate the ability to move ahead of competitors more efficiently and at a greater pace – if it works.
Good tech just works. It’s that simple. Tech for tech’s sake is not taking a strategic mindset approach. While it’s true that technology has become integral to business operations, it can be counterproductive not to integrate it into all strategic business discussions.
In turn, this will set the scene for continual improvement in ICT infrastructure and systems in line with where the company is going, rather than playing catch-up.
The real challenge remains − as it always has been when it comes to IT − how to ensure these investments truly deliver value.
This is where ‘to outsource or not to outsource’ really becomes the question.
For SMEs there are many benefits attached to outsourcing, or what is more commonly referred to as managed services. This model is based on transferring the IT function from strategy development through to execution to a specialised business positioned to take this headache away at a fraction of the cost of doing it in-house.
What are the financial benefits of managed services?
When it comes to IT, one of the biggest headaches for SMEs is cost unpredictability. Technology is changing rapidly and constantly needs to be refreshed; IT projects can be lengthy and often overrun budgets; and IT staff are not only in short supply but are expensive and at constant risk of being poached.
This variability makes financial planning difficult, and unpredictability is the one thing that keeps business owners awake at night.
Good tech just works. It’s that simple. Tech for tech’s sake is not taking a strategic mindset approach.
This is where the managed services option comes into its own with a fixed monthly cost, eliminating capex outlay as well as the other costs associated with buying, maintaining and supporting IT. Depending on the scope of the managed services engagement, one would also have to factor in the cost saving of providing IT facilities and physical security.
Aside from cost savings and cost predictability, there is a wider picture attached to outsourcing IT services to a third-party. The first of these is a lower risk profile as the contract will specify service-level agreements that can be aligned to the organisation’s business continuity plan, ensuring control remains with the client where it belongs.
The service provider will also take on the responsibility (and headache) of ensuring adequate staffing at all times, managing leave and, importantly, training. This last point is important because IT is a highly-technical area that is changing all the time − keeping in-house staff trained is one of the major expenses and management challenges. The service provider can also access scarce skills more easily for specific projects.
And then there is cyber security − last and certainly not least in the age of cyber breaches in the digital economy. Outsourced cyber security provides organisations with 24/7, expert-level threat monitoring, advanced technology access, and reduced operational costs compared to maintaining in-house teams.
It strengthens security posture through rapid incident response, regulatory compliance support and allows internal staff to focus on core business activities.
Overall, perhaps the biggest benefit is that the service provider is an expert with a great depth of knowledge and experience. It is thus fully conversant with best practices when it comes to delivering IT and can also act as a trusted advisor when it comes to IT strategy.
For example, it’s easy for non-IT people to be swept up by current fashions like cloud. Cloud, however, must be approached with caution because its total cost of ownership can soar, and it is not suitable for all business models. A seasoned managed services provider can provide essential guidance to ensure the right IT direction is taken, irrespective of current fads.
A reputable managed services provider will also have an established programme of continuous improvement in place − a huge benefit to the client organisation.
In short, managed services can solve many of the most pressing challenges facing SMEs when it comes to funding and managing IT, while greatly strengthening the organisation’s capacity in this vital discipline.
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