Placing non-core business functions in the hands of specialist service providers is an accepted way to improve efficiency and lower costs. Medium-sized companies are increasingly looking to gain these benefits by outsourcing their ICT requirements.
Isaac Mophatlane, Business Connexion`s Pretoria regional chief executive, says that the concept of ICT outsourcing is still fairly new within the medium-sized business market and is viewed with trepidation by some managers of these companies.
"Most managers are well aware that company productivity is dependent on technology systems and services. Outsourcing these may look like a good idea on paper, but the manager also has to be sure that when he or she signs on the dotted line, the services and systems are delivered as agreed," he says.
Business Connexion`s Western Cape regional chief executive, Phil Savides, notes that medium-sized businesses are now beginning to seek a competitive-edge from effective procurement of ICT.
"ICT outsourcing can benefit the medium-sized company, with a specialist providing the required services, leveraging economies of scale and bringing best practices and governance principles to bear. However, companies interested in gaining the benefits of outsourced technology should evaluate their potential service providers carefully," he says.
What should the first time outsourcer look for in a managed services provider?
Business Connexion`s Eastern Cape regional chief executive, Gert Cronj'e, says: "Topping the list is the managed service provider`s ability to deliver. Look for a proven track record."
Mophatlane concurs: "A loyal client base is probably the most important indicator of a company`s ability to deliver. Insist on client references that can show the benefits of an optimally managed environment."
Sydney Ramutla, Business Connexion`s Johannesburg regional chief executive, expands: "Look for recent research, which will provide insight into capability and market positioning, in addition to client references from companies of a similar size," he says.
Closely following track record, Savides says, the service provider should have the regional capacity and resources to assume responsibility for the client`s ICT environment. "Some companies have a tendency to oversell. There is a skills shortage in South Africa, so managers need to know that the chosen provider actually has the relevant skills to deliver."
Mophatlane agrees: "Ensuring continuity of business systems is critical when using managed services for the first time - any interruption poses a threat to business." He explains that the effective provision of managed services is a complex function dependent on a variety of resources. The service provider should have all the necessary technology skills, equipment and facilities to deliver.
Business Connexion`s KwaZulu-Natal regional chief executive, Will Heygate, stresses that a regional presence coupled with a national footprint gives clients the assurance of access to the latest technologies with local skills on hand.
He maintains that the single most important component of a successful outsourcing relationship is the service provider`s ability to understand `what makes the client`s business tick`. "This could mean, for example, the awareness that a printer in the warehouse is crucial to the company`s success as nothing can be dispatched without a delivery note. The cost of the printer may be insignificant, but without it the business will come to a standstill," he says.
Cronj'e concurs: "The use of technology in the medium-sized business environment may be quite different from one company to the next. The selected managed services provider must therefore offer flexibility to ensure the ICT solutions delivered meet individual client needs," he says.
Flexibility should extend to the types of services offered. Ramutla explains: "The first time outsourcer might want to evaluate the managed services business model by starting with a relatively simple part of the ICT infrastructure, such as desktop support or e-mail, before moving onto a full outsourcing contract. Once satisfied with the value, he or she could start looking at outsourcing applications or business processes. The level of confidence is enhanced by a successful partial outsource contract. Alternatively the company may want to outsource some elements of its ICT environment while keeping others in-house. Whatever the requirements, a mature service provider should be able to adapt to meet them," he says.
Cronj'e stresses that a regional presence coupled with a national footprint gives clients the assurance of access to the latest technologies with local skills on hand, while noting that it is becoming increasingly advantageous to use a BEE-compliant service provider in order to meet economic empowerment goals.
Business Connexion has made significant investments in facilities and capacity and can bring the power of a 4 500-member staff complement to bear on any ICT problem. "As a result we are seeing more medium-sized businesses looking to gain the benefits of outsourced ICT delivered in accordance with the highest corporate governance standards, at competitive prices and customised to meet individual client requirements," concludes Mophatlane.
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