IT services generally fall into two categories: strategic parts of business operations; and commodity services common to many. Outsourcing usually starts with the latter because of the need for reliability and the fact that these services do not uniquely differentiate your business from competitors. For other outsourcing, there is a simple rule of thumb: ‘don’t outsource the heart of your business’.

Non-core services that are self contained and separate from normal business operations can often be done better and cheaper by specialists. An example would be Wide Area Network (WAN) links between office locations. Outsourcers can provide network management services that are more cost effective when deployed on a larger scale. Factor in automated monitoring and 24-hour service personnel to fix problems in a timely manner, and this can be a very cost-effective arrangement. The company benefits from an increased level of sophistication with the cost shared among other companies.

More than cost cutting

But there is more to outsourcing than just saving money. A common failure is to overlook how IT is incorporated in new business initiatives. IT departments ideally help business colleagues understand new enabling technologies and how they can solve problems and advance business goals. If innovation is important to your company, you need to make sure that you have some tech-savvy IT staff that also understand the business.

When does outsourcing become strategic? When you find an IT partner that can work collaboratively with your staff to help plan and implement new initiatives. Such a partner will reduce the time it takes to complete new projects, add temporary specialized skills, improve reliability, prevent business interruption, and provide hands on training in new products or services tailored to your environment. For most businesses, a combination of outsourcing, staffing to maintain business continuity knowledge and vision, and a selection of more specialized collaborative working partners is the best way to go.