IT outsourcing is an increasingly popular business strategy. A 2017 report by Deloitte states that 31% of IT services were outsourced in 2017, the primary reasons being to cut costs and enable focus on core business activities. The figure is predicted to be higher this year, with the finance, HR and IT sectors presenting the highest future opportunities for outsourcing growth (at 36%, 32% and 31% respectively).
In past blogs, we have looked at the pros and cons of outsourcing and the circumstances in which outsourcing might be beneficial to an organisation. We've also explored the reasons why an organisation might choose to keep their IT in-house.
In today's blog, we look at the factors that are driving the trend to outsource and why so many businesses are seeing the benefits of outsourcing.
Opex versus Capex
Part of the appeal of outsourcing lies in Opex (operational expenditure) versus Capex (capital expenditure). Servers, network switches, storage and other computing resources required to keep IT in-house can be very expensive to buy upfront. Plus, they don't last forever; equipment will inevitably need replacing at some point in the future. Outsourcing your IT to a Managed Services Provider removes capital expenditure costs of paying upfront for expensive software or servers, instead replacing it with a predictable, monthly operational cost. You don't foot the bill of replacing old or broken equipment, and your software is also updated as needed by your MSP. The relatively small Opex costs of outsourcing compared with the (often) substantial Capex costs of keeping IT in-house makes outsourcing an attractive option for many organisations.
Increased security threat
The volume and severity of data hacks is growing. With some of the biggest companies in the world falling victim to a hack in recent years, it seems no organisation is immune. For this reason, more and more organisations are outsourcing their IT security to experts. Using an MSP for your security gives you 24/7 monitoring and advanced threat detection along with access to the most robust security software and firewalls, and the added benefit of disaster recovery procedures should the worst happen. Outsourcing security gives many organisations peace of mind and usually provides a higher standard of security than an in-house team could provide.
Rapidly changing software
Technology and software is rapidly changing. No sooner has one software version been released than the next one is ready to go, and you need to upgrade. Keeping up with and upgrading to the latest software versions can be expensive, time-consuming, and unrealistic for organisations to do themselves. Outsourcing your IT to an MSP takes this stress (and cost) away. Your MSP will ensure upgrades take place as soon as the latest version is available, and upgrade your enterprise as seamlessly as possible, with minimal disruption and downtime.
Rise in mobile working
Mobile working is the new norm, with few organisations expecting staff to work from the office every day. Cloud computing has been the major catalyst in this. Using a Cloud-hosted environment allows staff to work remotely but securely, accessing all the documents they need and being instantly reachable. Many organisations have adopted a cloud-hosted environment to enable staff to work remotely, and outsourcing makes this possible.
Industry competition
There's growing competition in most sectors of business, so organisations are always looking for ways to stay ahead of their rivals. Outsourcing gives access to expert skills and resources that companies may not otherwise have been able to access. The high-quality service provided by the MSP to the client allows the client to provide the best possible service to their customers. Organisations that choose to outsource their IT may have slicker and more efficient operations than those who choose to keep IT in-house, which is a big factor in the growing trend to outsource.
It's more cost-effective
Last but by no means least, one of the major factors driving the trend for IT outsourcing is its cost-effectiveness in an uncertain economy. As touched upon in Opex versus Capex, outsourcing is an effective way of controlling operating costs and comes with the added benefit that it can be scaled up or down as needed. Costs associated with in-house employees include salary, training, equipment and software, plus there is an expense associated with recruiting and replacing an employee if they leave. Outsourcing removes all of these costs, replacing them instead with a fixed monthly outgoing for the services you use and with no risk of a key employee leaving.
If your organisation would benefit from IT outsourcing, contact Core today to find out how our services can help you. From security and compliance to Managed Services, we have a range of IT solutions which can put you at an advantage and help your organisation to work more efficiently. Our services include:
Have a chat with a member of our team on +44 20 7626 0516 or fill in our contact form.