Outsource or In-House?

Does it make sense to outsource your IT?

There’s no single right answer to this question. A great deal depends on the following:

Can your in-house team do the job well?
Can someone else do the job better?
If the answer to the second question is “yes,” will the difference be enough to cover the cost of their services less your internal management savings?

We believe that the answer to the second question is “Yes” in almost every case. As your company matures the level of complexity necessary to optimize for size and efficiency has grown beyond all but a handful of the very best in-house network administrators.

The right outsourcing relationship should involve:

Trust that the company you chose has better personnel than you could find or hire;
Recognition that they have tactical expertise and experience beyond that of your internal team;
Oversight and collaboration with respect to goals and general strategies rather than tactical details; and
Reducing the need for internal management. You shouldn’t need a full-time employee sitting in your office unless your systems are astronomically huge, or unless your systems are ineffectual.
Flexibility, extra assistance when you need it, a broader level of IT skills and expertise and potentially lower costs.

Structure

Cost often drives the outsourcing of key IT applications and services, but your analysis shouldn’t stop there. Factoring in employee salaries, employee workloads, and the core expertise of your IT department also needs to come into play when making the decision to outsource or keep the IT applications/systems under the management of your in-house staff.

For brevity sake, this case study will focus on the ongoing support needs and costs associated with a small to medium business that is selling a service.

In this example we’ll focus on the legal services industry. The law firm of Hamilton, Madison and Jay employs 22 lawyers, 15 executive assistants, 10 paralegals and 20 associates. They have a single office located in San Francisco California and have one network administrator as well as a junior level technician that assists the network admin with daily operations. The network administrator is retiring in one month. The management committee needs to identify the route the firm will take in the future.

Over the last 10 years the IT needs of the firm have changed dramatically as technology has evolved and the firm’s caseload has grown.

Hamilton, Madison and Jay LLC: Current setup

75 Desktops and Laptops
Digital Phone System
8 servers providing interoffice support functions as well as hosting the time and billing system, client databases, company website and email, backups and blackberries

Continue Article – Breakdown of the costs »

Working Through the Buzzwords
Examining some of today's corporate technology buzzwords to discover common principles for corporate software development. Read More

Case Study: Exchange Server Recovery
In extreme disaster scenarios, NSK Inc will get all of your data back to your fingertips as quickly as possible. Read More