IT outsourcing is now best practice for business IT services management. External IT management is done under contract, fixing overhead costs and locking in IT services. This is the new cost-efficient scalable paradigm for businesses of all sizes.

IT outsourcing basics

IT outsourcing is based on basic business economics. The idea is simple:

• Control IT costs
• Ensure fully IT service
• Get a custom-made IT service fully scaled to business
• Eliminate admin and internal IT operational costs

External IT service includes:

• 24 hour support, in some cases world wide
• Help desk support
• PC tech support
• Integrated IT upgrades
• Offsite backups
• Integrated IT, computers and software
• Hosted applications
• Remote technical support
• Database design and management
• Training for staff on IT systems and new software

The IT outsourcing approach includes reducing the need for management and internal cost issues. These services include operational management assistance from IT consulting companies in all aspects of IT management and operations.

Cost benefits of IT outsourcing

The IT outsourcing paradigm is process is based on measurable values. It’s possible to cost the benefits in clear dollar based benefits. The fact is that in most businesses IT is an extra administrative function, not core business. It’s also not the area of expertise of most managers. This work can be done remotely. When done on a contract basis, costs are controlled within the contract terms.

This arrangement eliminates the internal administration and cost issues created by IT operations. IT budgets, acquisitions of new software, hardware and related equipment are all streamlined and done in consultation with IT experts on a needs basis.

These are all high value savings across the board for businesses. In most cases, simply rationalizing the IT administration and management issues is a major cost saver. For large businesses, these savings can quite literally be millions of dollars over time.

IT outsourcing is also a major quality control on business systems management. The outsourcers are industry experts, able to design better business IT systems for businesses using current best practice IT systems and platforms. This range of efficiencies impacts all areas of business and improves the cost of operations, providing custom IT solutions and eliminating the notorious multiple separate systems problems that can affect business management.

IT outsourcing in practice

An example of IT outsourcing:

ABCDE Inc is a big warehouse operator which services the retail sector. It uses a range of administrative software of various types, including some standalone systems for distribution, a website and separate reporting systems for inventory and ordering. Data from these systems has to be translated manually on to the business administration management systems. The net real cost of IT to the business is about $500,000 not including upgrades and new equipment costs.

VWXYZ supplies an outsourcing solution which includes:

• Integration of inventory and other IT systems with business administration

• Upgrade of business management software to an enterprise management system, which is a full spectrum management system providing information in real time to management. This also eliminates the time lag in reporting.

• Full IT services as described above.

Net cost- $350,000 including training.

The effect of IT outsourcing is really basic arithmetic. It’s cheaper, far more efficient and improves performance. Check out IT outsourcing options for your business. You’ll be astonished at the possibilities.