I hate to give the “it depends” answer, but the decision to outsource all or part of IT Service Management really does depend on a number of factors. Nimsoft ITSM experts help deliver IT Service Management solutions from both enterprise and outsource perspectives. Here we discuss factors that should go into your decision to insource or outsource ITSM.
IT Service Management Reality Check…
We prefer to think of IT Service Management as a strategic function that contributes to the success of any given enterprise. So if you’re definition of ITSM is more tactical and all about ITSM tasks—project management, functional requirements specifications, hardware/software configuration, etc .—then read no further. All of that can be outsourced, but success must be defined and driven by an internal leadership team that understands business strategy and how ITSM fits.
What’s sadly lacking in some organizations is an IT Service Management strategy that’s aligned with the business strategy. Without an aligned ITSM strategy, how will you know what to invest in to grow and add value to the business; how will you optimize your IT assets and meet the needs of your customers. More importantly, how will you know what success looks like and whether or not you have the in-house capability to achieve success cost effectively or to at least identify outsource opportunities that will enhance or accelerate success.
Business Considerations that go into IT Service Management Outsourcing Decisions
The following considerations could affect your decision of what to outsource, if it’s a viable option at all. If your organization is following ITSM best practices, such as ITIL, then you’re already on your way to establishing the in-house management capability required to ensure a smooth transition should you decide to outsource.
- Change Management
Is your organization growing faster than it’s building IT Service management capabilities? For example the integration following a merger or acquisition almost always brings concerns of application and infrastructure scale for the short-term integration and the long term restructured organization. Conversely, as organizations consolidate or move facilities to other parts of the world how will your IT investments be optimized? With a good practice configuration management database (CMDB) in place and IT monitoring in place, change management can occur without unexpected “surprises.”
- Industry / Environment
Your decision to outsource could be affected by industry regulation. For example, financial services firms must consider the impact of government regulations on data management. Do you have the internal IT capacity/capability to protect data and ensure audit trails, or could such data be handled more effectively by an outsource provider? Are you operating in a risk-tolerant or risk-averse environment? Your appetite for risk along with the degree to which your processes are under control will help you make a smarter business decision.
- Overall Business Climate
Whether weak, strong or uncertain, the business climate can present opportunities for IT Service Management to address business needs. A service that at one time may not have been a viable candidate for outsourcing, may now have become a consideration. The volatility of today’s business climate is a moving target for IT Service Management. Often in an uncertain business environment, outsourcing can be an attractive short-term alternative to hefty long-term capital investments. Again, the degree to which you have control over your current ITSM processes and alignment with business objectives will determine the financial viability of outsourcing.
In addition to business considerations, the condition of your end-to-end IT infrastructure and processes can influence the success of an outsourcing endeavor. Good monitoring processes can facilitate the decision to outsource, and if outsourcing becomes a reality, then having an updated CMBD will go a long way toward ensuring that outsourcing changes don’t impact other areas of IT Service Management.
What are ITSM professionals outsourcing and why?
A Computer Economics study, IT Outsourcing Statistics 2011/2012, finds partial outsourcing to be the most frequently used approach. Thanks to Software-as-a-Service, application hosting is one of the fastest growing outsourced functions, according to the study. When it comes to reducing costs, the Help Desk represents the greatest potential from outsourcing. The study also identifies four key IT Service Management areas that have the greatest outsourcing potential relative to improved service levels and costs including, application maintenance, application hosting, data center operations and network operations.
Our experience in working with both enterprise and outsource clients follows a similar trend as the study. In addition, we find that ITSM organizations with effective integrated process control in place, are better positioned to capitalize on outsourcing than organizations that take a tactical approach to IT Service Management. With a strategic approach to IT Service Management, insource versus outsource decisions are made with greater clarity, there are more options to consider, and the probability of success is greater.
Learn how Nimsoft ITSM experts can help you leverage IT Service Management to drive an effective IT Service Management strategy that keeps your business objectives in clear focus.