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Outsource or Insource IT?

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Originally published by James on LinkedIn.

In Conclusion – Bottom Line

IT has changed. Nobody in the innovation space is building complex IT infrastructure and nor should you.

As a result, choosing an IT support model should reflect your business strategy. If it’s about cost, then reduce your baseline IT requirements.  If it’s about innovation and disruption then your insourced or outsourced IT provider must operates above the line and have the skills and expertise to drive innovation and change in your organisation.

James is the Managing Director of I Know IT, a company founded on the basis that your IT should simply work. Once IT is working the goal is to use it to your competitive advantage.

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Read on..

IT is intrinsically linked to every single aspect of business today.  No matter what industry or what department, new IT in the cloud underpins your business processes through software not hardware.

Software is not the same as it was a decade ago.  With the exception of some legacy programs that haven’t evolved in your industry yet – cloud software is easier to setup, doesn’t require complex IT infrastructure and can be turned off and on as required for scale, or contraction.

As a result, baseline IT – the computers, networks and tools you use in your office are now a commodity, less complex and require less skills to maintain and are easy to cost compare.

So if baseline IT is so easy, do you need an inhouse IT department, or an outsourced IT department and in both scenario’s what are the roles?

Managing your Baseline IT

Baseline IT is a commodity – you can purchase computers from just about anywhere, servers – if they are even required anymore, are easily researched and installed to fit your business requirements, internet is a free market and an aggressively priced one driven by competition from the NBN and the wholesale ISP market.  It has never been a better time to review your baseline IT and how baseline IT is managed.

In this instance the roles for managing your baseline IT are simple:  speed, skillset, market knowledge, capacity.

In this instance the roles for managing your baseline IT are simple:  speed, skillset, market knowledge, capacity.

When outsourcing baseline IT it’s important your service provider has all of the above competencies – yes, they need to be smart and capable, but given the type of IT support being provided the service should also be cost effective and fast.  Your service agreements with your provider should reflect speed and agility.

Businesses who insource IT support should expect a more diverse range of skills from their IT staff because the baseline management of IT has been simplified. Many of the IT support functions should be automated and free up your internal IT experts to work on improving business processes, simplifying any remaining complex IT infrastructure, negotiating for better performance and pricing from IT suppliers and improving business security and IP protection.

If your IT requirements are simple and you’re already ahead of your competition then outsourcing IT is a more cost effective and efficient model.

Above the Line IT

Above the line IT is about business improvement and innovation – in my previous article I illustrated that innovation is Above the Line – IT that is smart, cloud based, free of complexity and focused on customer outcomes.

When outsourcing to an IT provider to promote innovation it’s about assessing the depth of skills that the outsourcer can bring to the table.  Are they about baseline IT – widgets, boxes and speaking to you in computer language – or are they an enabler of change, specialising in certain software applications, software development, business streamlining and able to help you make a competitive play in your sector?

An outsourced IT provider who operates above the line should have little concern in profiting from baseline IT – they already know that it’s a commodity and that it should ‘just work’.  Their concern will be for your business strategy, are you keeping up with the market, are you in a strategic position through your IT and what are the initiatives that will put you in front?

An outsourced IT provider who operates above the line should have little concern in profiting from baseline IT – they already know that it’s a commodity and that it should ‘just work’.  Their concern will be for your business strategy, are you keeping up with the market, are you in a strategic position through your IT and what are the initiatives that will put you in front?

An insourced IT department who operates above the line is willing to simplify IT to a point that it is of no distraction to the day to day operations of the company. While they may have originally been hired to keep IT running, knowing that baseline IT can be simplified means the insourced IT provider must be strategic and be driving a roadmap of innovation for your company.

James Vickery
Visit I Know IT

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