At Columbus, we believe that with the right partner, IT outsourcing can shift your business from going with the flow to driving it. It can actually put you in the right position to be proactive, especially in the face of change. We all need this right now.
As a leader responsible for IT resources, you have a lot on your plate:
- Keeping up with unyielding demand for digital tools to support your workforce and customers
- Supply chain disruptions, which are hurting your ability to get the equipment you need at the price you’d like
- Finding the right talent to fill positions in IT in a shallow pool of candidates
- Ongoing cybersecurity and data-privacy threats
Amidst all this, you probably feel the pressure to push down costs within IT and throughout the organization, due to growing inflation and worries about a potential recession.
You also feel like you need to right-size your organization’s resources, but that is made more difficult because you have to ensure your IT infrastructure doesn’t collapse at the first sign of a problem.
It’s a lot to balance.
All eyes are on you, and expectations are high. How can you cut costs without cutting your impact and ability to respond in a crisis? As you look forward, consider outsourcing application management and support as a part of the solution.
Eton, a Danish shirt manufacturer, are glad they did.
Why outsource IT?
“Outsourcing IT” as a phrase tends to have a negative flavour – and is often seen as more of reactive than proactive. At Columbus, we understand and approach IT outsourcing a little differently. Our team proactively monitors, maintains and manages your entire application portfolio to ensure you’re getting a return on the investment and making the most of your system. This is also referred to as managed services. That includes ensuring uptime; managing releases and other updates for security, compatibility and usage; and providing support 24/7 with guaranteed SLAs.
The business value you can bring to the table with this approach includes:
- Keeping up with the rapidly changing pace of technology without the added cost of training or new hires
- A proactive approach to monitoring and keeping applications up to date, which prevents potential issues from becoming real problems and turning into downtime
- Ability to scale more quickly – whether that’s up in good times, or down when times are tight
- Less stress for your internal team, who no longer have to deal with daily frustrations and can stay focused on initiatives that drive the company forward
- Ability to implement a structured and well-executed governance model
- Meeting compliance requirements for your business
All these benefits make a company more resilient, even while saving them money both directly and indirectly.
And the biggest benefit of outsourcing – given today’s uncertain economy – is that you need to focus on your main business. You can’t afford for your IT team to be caught up in the weeds of routine updates and fixes.
They need to think strategically and look for how they can effectively support new growth opportunities. That’s how you’ll come out ahead.
Where can you strengthen your business and save costs by outsourcing IT?
With the right partner, the benefits of outsourcing IT can actually make you stronger. But it can also produce significant cost savings, which is what many IT leaders need right now.
We’ve found, across the hundreds of engagements we’ve had with businesses like yours, that using a third party to provide proactive application management services can reduce the cost of a solution by 20% to 30%, compared with using your own resources.
Where do these savings come from?
IT staffing. A big area of cost savings comes in labor. Running a modern solution such as Microsoft Dynamics 365 requires a wide range of specialists. Providing support 24/7 is even more difficult, requiring several FTEs to fill just that need. Stacking your IT team with the skills and expertise you need to manage those solutions and respond to all the threats you’re facing today is costly. In fact, sometimes you need just a third of the skills someone can offer, but you have to pay for 100%. Or you end up with a team that has more breadth of knowledge, than depth. Training is also a cost to ensure your team stays up to date. Our team works with hundreds of customers – gaining knowledge that would be nearly impossible for any one internal team to accumulate. Not only do you experience labour and training savings with IT outsourcing, but your team will learn from the best practices we’ve seen in other businesses along the way.
More predictable costs. The outsourcing of skills and responsibility over application management gives you more control over costs, as you dynamically adjust your needs up and down depending on your business’s requirements. You’ll spend exactly what you need to.
Prevents downtime. Do you know the price of one hour of downtime for your business? It varies based on how you operate, and the scale of your operations, but one estimate from Gartner puts it at close to $5,600 a minute. In one survey, most respondents put the cost at $100,000 an hour. The right partner can proactively handle your IT environment to avoid breakdown and the steep costs that come with that.
Risk reduction. Updates to your cloud ERP can disrupt the stability and security of your solution, and they may not play well with important third-party software. Testing ensures that we catch and fix those issues before they are a problem. In our experience, detecting an error at the testing stage costs at least 5X less for a business.
Cost of reactive repairs and extra working hours. That extra time spent fixing problems can add up and pull resources and energy away from longer-term strategic initiatives. In addition, the time your users wait to see issues resolved by an internal IT team slow their ability to do their jobs, and in some cases brings their work to a standstill.
Only paying for the services you need. Some vendors only allow you to buy a package of services, whether or not your business needs it. At Columbus we do it differently and allow any business to only use and pay for the services you need.
Efficiency savings. Leveraging a partner’s expertise and proven methodologies – developed over years of working with hundreds of companies – results in greater efficiencies across the board for each of the processes they tackle.
What to look for in an IT outsourcing partner
Rather than piece out IT services to different providers, more companies are selecting a single provider that can become a real partner to their business – even an extension of their team. That limits the number of hands that are in your business and eliminates the risk that comes with having multiple third-party providers.
If you want to cash in on the savings we outlined above – while improving the resiliency of your business – make sure:
- The services to be outsourced are clearly defined, and that the quality of service you’ll get from your third-party partner is as good or better than what you could cost-effectively get from your internal team. All of Columbus’s services are well-defined and have mature processes and follow best practices, which means we get it right the first time.
- People in your own organization are aware of expectations in a relationship with a third-party provider. Columbus engage with a service delivery manager and embraces governance that ensures it sticks to the initial plans and produces expected deliverables. Columbus not only executes, but continually calibrate their work.
- The partner understands your business. When a partner not only delivers IT services but also understands the why and logic behind each decision, a partner can be a real advisor – even saying no when a solution doesn’t make sense and offer a better alternative.
- The outsourced partner is flexible. They must be able to scale up or down to effectively serve you, which is a top benefit of an outsourced application management provider.
How much can you save through hard costs and added value?
Your cost savings will depend on how complex your business is, your solution availability needs, how complex your solutions are and how frequently you need to update your solution. It’s not just about hard dollars. It’s about savings in time, resources and actual cost – while ensuring greater security, efficiencies and reliability. But most importantly, you utilize the full potential of your solution and achieve the projected business benefits.
With that equation – and the right partner – it’s hard to lose.
Get your own assessment today on how much you can save – and gain – by partnering with Columbus.