Companies outsource for a myriad of reasons. For smaller businesses, outsourcing might become necessary when the company needs to concentrate on their core processes, and relegate non-strategic core areas to a specialist company with the resources and know-how.
It makes good business sense to outsource non-core or specialised areas such as IT-related tasks. This does not only cut costs, but frees up valuable time for employees to perform their most essential tasks. However, not many companies thoroughly understand the value of outsourcing or how to handle the outsourcing relationship.
Companies with a specialist outsourcing division can provide a valuable service to small businesses by providing maintenance, project management, technical resources, software support and infrastructure maintenance to SMEs who do not have the in-house resources.
According to Jacques du Preez, former GM of MWEB's division, Netsight, "outsourcing of IT decisions has grown exponentially in the last few years, and it does not look like the trend is slowing down. This is mainly because the factors that make the outsourcing of IT maintenance so attractive will always be there.
Every company wants to achieve cost savings. Every company wants to focus on what they know best and factors such as access to innovation, increased speed to market, and service quality are very vital. All of which combine to make outsourcing a worthwhile value proposition."
Some key benefits of outsourcing your IT:
- Increased productivity by optimally utilising resources
- Gain competitive edge by focusing on core business areas
- Lower costs through lesser overheads and expenses
- Access to world-class IT skills, experience and resources
The keys to a successful outsourcing relationship are transparency, trust and collaboration, says du Preez, "Without this combination the relationship will be fraught with frustration and the goals will not be met."
Once an outsourcing deal has been concluded with a service provider, committed management of the outsourcing relationship is critical to its success. A successful outsourcing requires processes and procedures for managing the relationship between the customer and the service provider: for example, regular service meetings, agreed processes for reviewing the services (preferably involving benchmarking provision against other service providers), reporting procedures and a robust mechanism for escalating and resolving problems.
An outsourcing services contract – sometimes called a Service Level Agreement – is not a contract which should be put in a drawer once signed, it should be a live and operational document.
According to The Outsourcing Best Practice Guidelines, both parties need to define clear escalation procedures. Without clear escalation procedures, end-users may not know how to raise problems which means that they will take longer to resolve, cost more and cause more inconvenience.
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