The Role of IT Outsourcing in Digital Innovation
Companies are accessing managed IT services at rates not seen since the Great Recession, according to a Computer Economics survey referenced in Data Center Journal. In 2017, outsourcing as a percentage of the total IT budget reached nearly 12%.
And although the percentage of IT budget spend on outsourcing has grown, companies aren’t necessarily choosing outsourced IT solutions to cover additional functions—rather, they’re accessing the same types of managed IT services in greater numbers. That trend ties back to a broader movement observed across all industry types: company leaders, including CIOs, are focusing on where their workforce directly adds value and outsourcing functions that aren’t involved in a business’s core competencies.
A similar trend took hold with the advent of cloud infrastructure. Rather than investing in maintaining servers onsite, many companies choose to access cloud computing services from Amazon’s AWS or Microsoft Azure. This approach not only relieves companies of the expenses associated with maintaining an infrastructure in-house, but it also allows them to scale up quickly.
No matter what the industry, if the provision of in-house IT solutions doesn’t directly contribute to fulfilling the organization’s mission, using managed IT services might make more sense. As companies aim to achieve digital transformation, they need their in-house technology professionals focused on innovation and strategic initiatives. And that won’t happen if IT professionals are bogged down with end user incident support, device management or system performance monitoring.
None of this suggests that these functions aren’t important—company operations would soon grind to a halt without the essential support that these areas provide. But is handling these functions the best use of an in-house IT team’s time? Increasingly, it appears, business leaders are deciding it’s not. According to the Computer Economics survey, help desk and web operations are among the most popular IT managed services to outsource. The report also notes that outsourcing IT solutions such as help desk, desktop support, disaster recovery and data center operations have the most potential to cut costs, since economies of scale can lead to significant savings.
The trend of outsourcing IT services in order to focus on core competencies is just one factor that may be driving the heightened demand for managed IT services. Marketplace scarcity of certain IT skills, the issues caused by “shadow IT” (the tendency for employees to go outside the IT department to solve IT incidents), the need for digital transformation and other factors are also influencing decision-making around IT solutions sourcing.
To learn more, download our white paper that provides an overview of trends you may want to consider if you’re deciding whether to handle IT solutions in-house or seek out managed IT services from an outsourcing partner.
John Raos is Vice President of Operations for Innovative Technology Solutions.