If you were born 50,000 years ago, being a jack-of-all-trades wasn’t an option—it was a requirement for survival. Since there were few ways to store and pass on information (and the ones that existed weren’t exactly filed into searchable databases), our ancestors had to rely on their own knowledge and experience to navigate the world. Recognizing poisonous berries from edible ones, remembering animal herd movement patterns, reading the sun and the stars—to do these things, hunter-gatherers needed to keep terabytes worth of information in their heads at all times.
Today, the situation is different. Ever since people started co-habiting in larger, highly interdependent communities—such as cities—there was no longer a need to be able to do it all, and specialization became the key to survival. Jacks-of-all-trades are no longer useful, but extraordinary talents in the narrowest of fields are rewarded tremendously.
Businesses are the perfect manifestation of this societal shift. The key characteristic of any business is its specialization, and we judge the value of a business by how well it performs in its field. We determine a good business from a bad one by their industry-specific know-how and competence.
And yet, industry-specific competence is not enough to run a successful company today. It takes a diverse set of skills to run any competitive business today, from management and accounting to customer support and manufacturing.
One of such areas is Information Technology. I.T. today touches on most of the core departments in any given business, from communications to security, often in somewhat invisible ways. The larger the scale of the company, the exponentially more sophisticated the I.T. infrastructure.
As it happens, not all businesses have professional expertise in the field of I.T. Running in-house I.T. departments is wildly cost-inefficient due to high fixed infrastructure costs and soaring I.T. salaries.
What many business executives fail to realize is that they don’t have to be tied to one of the two traditional options: to have an in-house I.T. department, or to not have I.T. at all. Outsourcing I.T. services isn’t just a possibility in modern business, it is common practice, with over 53% of all companies outsourcing at least some part of their I.T. needs, according to a 2014 Deloitte survey.
It’s no surprise, really. Besides the cost advantage, outsourcing I.T. services takes a big managerial burden off the company’s executive layer. External I.T. service providers also come in handy when it comes to identifying the company’s I.T. needs and optimal solutions.
Let’s explore in more detail the situations in which it is a good idea to consider outsourcing I.T. services.
High-End In-House I.T. Departments are Only Cost-Effective at Large Scale
Perhaps the largest consideration for any business when making decisions of importance is the cost. Business owners and executives are most interested in one particular question regarding business technology: is it cheaper to have an in-house I.T. department, or to hire an outsourced provider?
While the question itself is an important one to ask, the way it’s answered is often flawed. Due to a lack of understanding of what modern I.T. services represent, an I.T. department is frequently painted as a single person managing some hardware in the backroom. When the cost of that image is compared to a full-fledged I.T. department that meets the industry’s standards, misleading conclusions occur.
The real question that ought to be asked, then, is whether a modern, fully-equipped and sophisticated in-house I.T. department is cheaper than the outsourced equivalent. And the answer to that, as it turns out, is in favor of the external departments nine times out of ten.
Why? The primary reason is high fixed costs. Due to the complicated nature of today’s high-end I.T. solutions and aggressive business demands, robust systems are required to enable the implementation of I.T. services. These systems involve not only the underlying hardware infrastructure but also people and process management systems that keep everything organized and secure. To have these systems built just to power your own company’s I.T. infrastructure is similar to building a personal power plant to keep the lights on at your family’s house.
But that’s not all.
Managing I.T. and Overlooking Successful Implementation Is a Full-time Job
Probably the most error-prone area in the I.T. industry is in management and implementation. Business leaders, when advised, are usually okay to make smart investment decisions—they can separate the wheat from the chaff—as in they are able to identify which I.T. services are most beneficial and will be required to facilitate their company’s growth.
But what is often failed to estimate is how new I.T. infrastructures are going to fit into the bigger picture. I.T. systems are no longer the irrelevant backroom appliances that you have someone check upon once a year. Today, I.T. enables most of the company’s day-to-day operations, and touches every single employee in the company. From communication, to customer relations, to data, to manufacturing—when I.T. goes down, you’re out of business.
This isn’t just to highlight the importance of sound I.T. infrastructures. It is to highlight that I.T. planning and implementation is not a stand-alone purchase—it is a service highly interconnected with each and every one of your business operations, and an accidental slip-up could cause catastrophic damages to your company.
Such is the danger of in-house I.T. departments. While Joe the long-time I.T. specialist might be able to facilitate the bare minimum of your company’s I.T. needs, it is up to management to ensure that the I.T. systems integrate seamlessly into the company’s cultural, operational, and legal anatomies.
That’s why companies hire external I.T. providers: to advise them on I.T. investment decisions, help them strategically plan out implementation to avoid potential shutdowns, and train their employees to enable a smooth transition to new I.T. systems.
JMARK has been helping businesses leverage technology for strategic and competitive advantages for thirty years. We know how to apply the best I.T. methods and solutions to help your company meet its goals. To discuss how we can help your business implement the best technology solutions for your specific needs, contact us now at 844-44-JMARK or [email protected].