A few decades ago, organizations’ information technology competencies entailed mainly procurement and maintenance of personal computers running standalone applications. Today, organizations operate in a far more complex information technology environment due to mobile workforces, business processes that span functional lines, and changes in how employees interact with customers and each other through social networking, instant messaging, and texting.
Many organizations have responded by making incremental investments in their IT workforces with additional staff and training. This approach can be helpful in the short term, but it raises long-term questions. How quickly can you respond to competitive challenges? How do you retain highly trained and valuable IT staff, as well as recruit for these positions? In addition, the sheer cost of keeping up with new technology can be staggering.
The answer to this dilemma is to include outsourcing as part of your company’s overall IT strategy. Recent developments in business applications have enabled organizations to mix and match their deployment methods. Many applications can now be deployed in both traditional and hosted models, affording flexibility to select the right systems and deployment method on a case-by-case basis.
Web-based platforms have been the key enabler for this evolution. The Internet has created a standardized operating platform that enjoys a high degree of user familiarity. Most users are not concerned with where an application resides when typing the application address into their browser. They are more concerned that the application performs in a robust and reliable manner. Software application firms have grown substantially in the past few years because they have developed their applications from a web-centric perspective, resulting in ease of deployment and rapid market share growth.
This evolution allows your organization to use outside resources for common business applications such as server applications, databases, productivity applications (word processing, spreadsheets, email, etc.), and website hosting. Internal IT resources can then be refocused on two value-added activities: business applications that support operating activities specific to the organization or its industry and management of relationships with outside service providers.
When evaluating outside service providers, pay particular attention to several service level-related items: response times, guarantees on system availability, hosting test environments, site mirroring, backup/restore, server virtualization, upgrade management, remote access, and disaster recovery. Also, these providers are just like any business in that they can experience financial difficulties and, as a result, fail to deliver services as promised. So, to mitigate your risks, be sure to conduct thorough due diligence into the provider’s business principles and stability.
Recent technology developments are challenging the traditional IT model while at the same time creating opportunities for organizations to effectively use outside resources to support many business systems and applications. The key is to determine whether to use internal or external resources on a case-by-case basis, taking into consideration all available resources, level of service, costs, and risks.