IT Managed Services: Lowering Costs through Hosting


By Chuck Vermillion

IT cost management has always been a hot topic for companies. However, the issue looms even larger in the current state of the economy. As IT spending continues to be scrutinized closely, technology managers really must do more with less. This article will provide you with information that will help you lower the costs associated with managing your IT operations through hosting.

Today, enterprises evaluate every IT activity to determine what should be funded or supported. During this evaluation, managers justify the demand and compare the project's costs relative to the projected ROI. Obviously, costs need be at the lowest level possible to demonstrate a greater ROI in a shorter period of time.

Investigating hosting and IT managed services as an alternative to traditional in-house service delivery should be done by IT leadership. Often an outsourced model can provide the same services or better services at a lower cost. This approach can save the organization money on an ongoing basis, as well as free up resources (both personnel and cash) that can be that can be deployed against other high-value projects. Before embarking on an outsourcing initiative the organizations will have to thoroughly understand all of the costs associated with their IT organization to ensure they are making the best decision possible for the organization.

For every IT project analysis, decision-makers should include an "in-house" versus "outsourcing" cost comparison. Although the benefits of outsourcing have become well known over the years, enterprises need to start at square-one and ask some basic questions.

IT MANAGED SERVICES: KEY CONSIDERATIONS
Prior to running the numbers, managers need to ask themselves why they would consider outsourcing. For example, if you started your business from scratch today, would you build this capability internally? To answer this question, you need to assess your internal capabilities:
- Would other companies hire you to do this for them?
- Will tomorrow's leaders of the company come from this area of the business?
- Are you receiving world-class services at a competitive cost today?
- Does this process create or defend a unique competitive advantage for your firm?
- Is this business process directly contributing to business growth or expansion?

If the answer to many of these questions is "no", then you should consider outsourcing.

To make the best decision for your company (and to save the most money), you must have the required expertise to manage your IT operations at peak performance. If you don't have, or can't afford, this expertise, your IT operations will most likely fall short of expectations and end up costing you more.

In addition, managers need to explore the reasons for outsourcing their IT services:
- Are you looking to solve tactical issues? For example, are you looking to achieve short-term results, immediate cost reductions and current staff augmentation?
- Are you looking to solve strategic issues? Is your focus longer-term and you want to free up your time for strategic initiatives? Do you want to improve your service level measures?
- Or, are other issues prompting you to outsource, such as leadership frustration or wanting to transfer risk to a third party?

Answers to these questions will provide valuable insight and help align outsourcing projects with business priorities in order to lower your costs and increase efficiency through IT managed services.




 
About the author

Chuck Vermillion is CEO and founder of OneNeck IT Services, a leading Enterprise Resource Planning outsource provider helping mid-market companies improve system performance. For more information about IT managed services, visit our site. from http://www.ContentHere.com


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