Outsource your IT
SMEs with limited resources can save costs and tap into up-to-date solutions by outsourcing their IT requirements.
Outsourcing is estimated to be a global market place worth over $600 billion per annum with cost-savings being the primary reason for doing so. According to research conducted by Duke University with International Association of Outsourcing Professionals (IAOP), 80 per cent of customers outsource to improve business performance and their overall operating model. The value of outsourcing is now measured less by costs saved and more by how it can help enable strategic growth, through rapid access to talent, increased agility and improved quality of service delivery.
Considering the rapid growth of SMEs, competition has increased within the sector. Forward-thinking SME owners and managers are continuously embracing technology to streamline processes and restructure their business models for greater profitability, according to Sachin Bhardwaj, Director of Marketing and Business Development of cloud infrastructure management firm, eHosting DataFort.
“Outsourcing to IT service companies offers small businesses multiple benefits. At a strategic level it allows companies to focus and leverage their resources towards their core business activities, rather than spending too much time on operational activities. On the operational level, outsourcing offers the skills and expertise of a service provider to manage complex IT infrastructure requirements competently,” said Bhardwaj.
“With an outsourcing partner, an SME can dedicate its human resources to focussing on winning new businesses and servicing existing customers,” said Hany Fahmy Aly, Executive Vice President of Enterprise Business at telecommunications company, du. He added that keeping up with developing IT trends falls on the partner company, which removes the risk of the small business owner falling behind and using outdated systems because management will no longer have to decide where to invest in IT and how to manage it, nor do they take a risk when investing in new technologies that may not be suitable.
“SME owners need to ensure that they find the right outsourcing partners that understand the industry in which the SME operates, and have a track record of helping their SME clients grow their business,” said Aly.
In terms of tapping into the best talent, John Kilmartin, Executive Director if ICT, Bahrain EDB thinks that outsourcing IT services prevents businesses from being limited to what is available locally and companies that may not be able to train employees in the early days can find the staff they need without having to invest in developing their skills.
“Bahrain has numerous educational and training centres that run programmes specifically tailored to the needs of companies establishing themselves in the Kingdom. Bahrain University and Polytechnic are among the institutions that offer advanced information and communications technology (ICT) training programmes and 12,000 of Bahrain’s 1.3 million population are currently employed in the ICT industry, and the number is expected to grow,” said Kilmartin.
According to Vic Bageria, CEO of business intelligence and solutions provider, Sàvant Data System business owners have to ask whether the task in question is worth outsourcing or not, and they have to carefully consider whether the cost of outsourcing is worth the increased efficiency of the business. Just because a business own can outsource a task does not mean that they should.
He added that tasks which contribute to a high operational impact tend to be outsourced to assist in the smooth running of the operation. If your company is not software-oriented, but requires other services to be polished, it is usually better to outsource than to hire, manage and pay employees.
“It is vital for companies to have full control over the business to avoid giving up its competitive edge. Never outsource areas that would directly impact your business and customers–always have full control of your online domain and social media channels,” Bageria said.
Almost 50 per cent of GCC executives lack confidence that their organisations have the right tools to predict, prevent and manage cyber-attacks, according to a poll by Gulf Business Machines (GBM) in March this year.
The 700 executives and IT professionals polled are based in the UAE, Qatar, Oman, Bahrain and Kuwait, and 48 per cent of respondents said that their organisations conduct regular third-party security assessments. Furthermore, only 40 per cent of organisations have a dedicated IT governance, risk and compliance function. Even though IT security budgets are getting more attention from 29 per cent of organisations, about 70 per cent of enterprises and SMEs do not outsource their security operations, and 71 per cent of executives confirmed that their IT security budgets will either stay the same or decrease in 2016.
“IT can be placed in the long- and short-term goals of companies. Strategic infrastructure can be worked on in manageable portions over a certain period by an internal IT team, while tactical IT projects can be outsourced to achieve certain short-term goals by a managed service provider,” said Bhardwaj. He added that with the constantly changing threat landscape, security is becoming critical which has resulted in a higher demand for managed security services.
“Almost every business can be seriously affected by cybercrime and it is an extremely complex challenge. By outsourcing, SMEs can rely on teams of security experts to keep their businesses free from cyberattacks, protecting the business’s reputation and revenue,” said Aly.
Making the transition from operating in-house to handing over a task to an outsource partner can be fraught with difficulties if communication is not clear and the roles are not clearly defined on each side. All parties concerned will benefit if they understand what is expected of them.
“SMEs should ensure that there are clear points of contact on both sides and everyone understands the outcomes and goals of the organisation. They need to communicate where they are today, as a business, and where they want to be in 12 to 18 months. Communication will remove risk and speed things along,” said Aly.
Offshore vs onshore
Outsourcing offshore or locally both come with their own set of pros and cons. While offshore partners may offer more cost-effective solutions, they also tend not to be tailored to the needs of the SME. The SME may save on costs initially, but cultural and time zone differences may work against them, impacting communication and delaying deliverables, said Bageria.
“Outsourcing locally can provide higher efficiency and productivity rates as communication can take place by telephone or email, minimising language gaps as well as relieving the owner’s frustration in resolving issues,” Bageria said.
Aly added an argument for using local partners because SMEs can build strong relationships while being assured that local regulations and business practices are accounted for, while receiving tailor-made solutions that can be scaled and adjusted as the business grows.
Finding the right outsource partner:
- Choose a partner that is evolving, changing, and ready to adapt to new trends in IT. SMEs need partners that are continuously refreshing their approach and are ready to offer the newest solutions available.
- Know the reputation of the provider to ensure the highest possible standards in maintaining efficiency. Talk to the call centre and earn about the potential supplier’s quality and scope of experience and turnaround time.
- Take into account the provider’s financial stability which will help to determine if the partnership will survive the long-run or not.
- Ensure the provider is compatible with the business. It is critical that they understand the company culture, which will facilitate good communication when handling conflict.
- Look into the provider’s experience because this will play a vital role in ensuring delivery of information. When entering a long-term contract be sure to ask for the experience and qualifications of all the relevant team members.
- Ensure the provider will adhere to industry best standards and practices.
- Ensure the provider offers year-round 24/7 support.
Source: Sachin Bhardwaj, eHosting DataFort; Vic Bageria, Sàvant Data System; Hany Fahmy Aly, du