IT outsourcing: the pros and cons

The case for and against outsourcing your IT

Okay, let’s address the elephant in the room first. We’re a Managed Services Provider, and yes, of course, we’d be delighted if you outsourced your IT to us.

So, won’t these IT managed services pros and cons be a little biased? Why would you expect a balanced view from an IT provider? Because at Content+Cloud headquarters, our reputation matters more than our order book (although we don’t deny that’s important, too).

We get out of bed every day because we want you to succeed. If we don’t see the benefit of a particular service to a client, we simply won’t suggest it. And please be our judge, read on, and we hope you find the case for and against outsourcing your IT useful.

The pros of outsourcing your IT

Improved flexibility and scalability

In today’s turbulent business landscape, you’re only too aware that your organisation must have the ability to react to changing market conditions quickly.

A flexible, multi-skilled workforce will help you do this. Your IT provider can be your workforce, on-call to ramp up – and scale back – as conditions change.

As your needs evolve, your provider can rally the relevant subject matter experts and resources from across their business, especially if they’re among the larger players with a broad service offering.

And if you need to replicate what you do at a new location, you’ll enjoy a consistent experience by working with them.

Keep pace with constant innovation

These are trying times for everyone, and no doubt you have your personal story to tell. We hope you and yours are doing okay. As the coronavirus forced us into a state of hibernation, it underscored our tremendous reliance on IT. Did your organisation’s tech enable you to transition smoothly to working from home?

Or maybe, in common with millions, you were swept up in a rush to adopt collaboration tools like Microsoft Teams and Zoom.

Your managed services provider continually invests in new products and services. They’re abuzz with ideas on modernising your workplace and invest vast sums in cutting edge security solutions. They’re obsessed with your future state and understand your need to be resilient, flexible, and agile.

So, when many organisations are choosing not to invest, you can work with a partner who is, and continue to enjoy access to first-generation tools and tech.

And we’ll hand it to Deloitte for the last word on this: “The outsourcing market is growing in complexity as well as size – IT’s impact on the business is growing, and with continuing economic uncertainty, there is an ever-stronger focus on innovation.”

Tried and tested service delivery models

Everything your managed service provider does is grounded in best practice; they design their service models to be repeatable and scalable. They have, frankly, processes, quality standards and performance measures coming out of their ears.

So, in return for your investment in your IT provider, you’ll get a level of assurance and comfort in the service they deliver, and your users will enjoy quality support.

And because your managed service provider applies their experiences and lessons learned from hundreds of other clients, you’ll reap the benefits of their big picture insights.

You might also like: IT Managed Services Glossary of Terms.

Access to specialist skills, top talent, and a ready-made network

Attracting, developing and retaining skilled IT staff is no walk in the park, especially against skills shortages in the UK technology industry. And when it comes to cybersecurity expertise, the challenge is even more formidable; only 10% of tech talent have cyber skills to fill skills gap.

Managed Services Providers (MSPs) and Managed Security Service Providers (MSSPs) lift the burden of sourcing great people from you. Through economies of scale and shared resources, they enable you to draw on a substantial talent pool that would cost a king’s ransom in-house.

And we’re not just talking about vanilla IT support or help with Cyber Essentials – valuable as they are. By introducing you to tech that might not be on your radar yet, an MSP or MSSP can unlock a whole new world of opportunity for your business.

And because they’re so well connected, you’ll join a community of your peers via client forums and events. Plus, you’ll have a gilt-edged pass to your provider’s established network of vendors and partners.

A quality managed services provider will be unafraid to respectfully challenge your thinking and encourage you to follow a different path when necessary. They’ll help upskill your in-house IT team and – above all, allow you to realise your ambitions faster.

Win more clients

Imagine you’re bidding for a juicy contract and find it stipulates that all data must be stored by a provider who complies with ISO 27001. You’re currently working towards this certification. By outsourcing that element, you can still enter the competition to win the business.

Or your talented in-house IT people are spending a disproportionate amount of time on keeping the lights on and putting out fires. Every hour devoted to the humdrum or an IT emergency is one hour less on what you need them for; like developing a new app or concentrating on your digital transformation.

By outsourcing some of your team’s load, you’ll liberate them to focus on the goals that will help build your business.

Conversely, let’s say you’re short on both the time and skills to achieve your ambitions, like modernising your application to steal a march on your competitors. A specialist third-party provider exists to take you to your destination as quickly as possible.

You might also like Three Powerful Examples of Application Modernisation.

The potential cons of outsourcing your IT

Language or cultural differences

If your provider delivers some services from other countries, consider any language barriers, cultural differences or time zone constraints that might impact on the quality of work or deliverables.

But regardless of where in the world your provider operates, all new relationships take time to mature, so a period of adjustment before things settle down is to be expected.

A disconnect between expectations and reality

If your requirements were not clearly articulated or comprehensively defined, frustrations could quickly creep in.

It’s essential to nail the scope of the contract with your MSP so that nothing is woolly or missed.  Where does ownership begin and end? A roles and responsibilities matrix will cover this. What are the critical success factors? Do the deliverables align with your goals?

A forensic review of the contract’s SLA, KPIs and escalation process is vital before the rubber hits the road. Your provider should instigate regular contract performance reviews, with a higher frequency in the first quarter.

They’ll also solicit your feedback; honesty on both sides is the bedrock of successful partnerships.

And while the odd hiccup is normal, don’t make things harder for yourself after the fact. Ensure you, your stakeholders and your IT provider are 100% aligned on how things will run from the onset.

Regulatory implications

If you’re in a heavily regulated industry like finance, you’ll know only too well the standards that apply to you. And of course, some regulations apply across the board, like the GDPR. And maybe you have key accounts which, for example, stipulate conditions around cyber-security or data processing locations.

If your provider is offshore, take care to check that they meet your regulatory requirements. In a dated (but still helpful) guide by Deloitte:

“Outsourcing can also bring regulatory and financial complexity, with legislation around services frequently changing and the tax implications of shifting sourcing strategies providing considerable complexity. Throw in issues such as risk, and rapid, game-changing technological advances such as cloud-computing, and you have a market increasing in both sophistication and significance.”

Your provider’s legal and contract people will be well-versed in these matters, accustomed to answering questions, and ensuring any necessary additional controls are in place.

You can read Deloitte’s guide here: The Outsourcing Handbook.

So, before getting into bed with a managed services provider, be clear on your governance and compliance requirements and check they’re covered.

Your relationship with your IT provider

When your IT is delivered in-house, there’s a degree of comfort and familiarity. Relationships develop organically and oil the wheels of our day. Or they put spokes in them, but hopefully not!

Unless you’re investing in dedicated IT support, your user base will frequently speak with different people, and these relationships will take longer to build.

On a broader note, never underestimate the importance of a cultural fit. Like most professionals, you’d probably prefer to deal with people who will listen, guide, and advise you. Service by rote, when the person on the other end of the line is patently following a script (and quite often one they’re unwilling to deviate from) can be frustrating.

But how do you establish such a fit? One way is to ask to be put in touch with a couple of your potential provider’s clients and gauge their experiences.

And regardless of how many digital trees it takes to create your contract and SLAs, ultimately, people buy from people. Vendors typically employ change management and transition experts to manage the implementation of your contract and replace them with operational leads at the end of the transition period. Ensure you get an early introduction to your operational leads and that you feel you can work with them.

And again, we liked what Deloitte had to say on this:

“The foundations of a long term, successful partnership are founded on your interactions with your vendor. It’s vital that contacts on both sides are identified to create a strong framework of collaboration.”

Stale and tired?

When we talk with potential clients, they’re usually already working with a Managed Services Provider. Naturally, we’re keen to understand their motivations for switching. A recurring theme is this: the first year was great – their provider helped them to innovate and improve. But after that, complacency crept in, and their evolution (or digital revolution – as we prefer to call it) slowed.

While the impetus should be on your provider to continue to help you to grow and achieve your ambitions, you have a part to play in this. And while we wouldn’t paint a picture in such dark colours as Deloitte…

“Frequently once the ‘ink is dry’ commitment to these activities falls away and expectation gaps begin to open – leading to self-feeding cycles of client criticism and vendor defensiveness. Such behaviours can needlessly undermine the deal’s objectives.“

…we do agree with their advice: “Critical success factors include:

• Ensuring senior interactions and meetings take place regularly and at least as per contractual commitments.
• Ensuring interactions focus on the right things, through good preparation and appropriate inputs and facilitation to ensure clear, fair and informed decisions are made.”

And again, much of this depends on with whom you get into bed. You’ll get a flavour of how your provider will interact with your organisation by looking at their website and social media feeds. Do they regularly publish helpful blogs and thought leadership pieces? Do they host webinars and other virtual events? All of this will give you an indication of how proactive they are, to ensure your continued success.