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Analyzing IT Needs: In-House Or Outsourced?
When it comes to information technology (IT) services, each business chooses a slightly different route. Depending on the size and needs of an operation, larger building service contractors may have an IT professional, full- or part-time, on staff; many businesses, however, are moving toward contracting out IT services to a consulting company or individual consultant.
Consultants offer a variety of IT services, from technology upgrades to the entire revamping or replacing of networks, servers and security programs. There is an upward trend toward small to mid-sized businesses outsourcing IT services, observes Tim Ernst, president of consulting firm TechFluent in Minneapolis.
“The reality is that the cost of IT resources — human resources — has gone up immensely,” Ernst says.
Daily Tasks Vs. Big Projects
The customers TechFluent typically works with are seeking one of two things: someone to manage IT from top to bottom or someone to come in for specialty design and implementation projects for which the customer does not have the time or expertise, such as high-end communication, network architecture and security.
Companies outsource IT, quite simply, because they’re finding a value in it that they couldn’t find internally, Ernst says.
“It’s the flat-out cost — you’ve got the cost of the employees and benefits and training and managing those people. Oftentimes that alone is enough to justify outsourcing,” he says. Bigger organizations are more likely to seek consultants to take advantage of their advanced competency or expertise in specific areas, which allows them to focus on core business functions.
That is one reason CAM Services, a mid-sized southern California-based BSC, decided to outsource IT four years ago. The company had previously assigned IT duties to an accounting employee based on that particular individual’s skill level, says David Herrera, company president. When the company anticipated more growth and decided it needed a new server, the time was right to switch to a consultant.
What CAM Services really wanted was someone who specialized and excelled in IT, who could help the company with future IT needs and who was a hardware professional, Herrera says.
After shopping around, the company found a consultant with an impressive resume, and has been happy with him ever since.
Though the company budget and personnel costs are obviously a big consideration when deciding whether to outsource IT, Ernst believes the decision should be made based on overall value.
Outsourcing may at first glance appear to be more expensive than the salary and benefits associated with an in-house IT professional, he says.
“But what [business owners] fail to often take into consideration is all the management time, the training time, all the hassles of dealing with the day-to-day activities as well as the opportunity costs of those times,” Ernst says. “It’s about focusing on your core business: What you do, what you do well. Focus your resources on that instead.”
Also, IT is historically a hard area to manage, due to constant changes in technology, Ernst says. Managers have a tough time staying on top of both technology and their employees.
Focusing employees on the core mission of CAM Services — rather than trying to be IT savvy — has benefited the company, Herrera says.
“It takes the guesswork out of it,” he says. “Our business is maintenance and construction services and we don’t really have anybody on staff that approaches [the IT consultant’s] expertise.”
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