IT outsourcing has been rising exponentially.
Pre-Covid, the main driver for outsourcing was cost reduction. Many small and much larger businesses used a third-party provider to keep the IT lights on under a flat cost arrangement, typically based on the number of users supported.
Medium sized businesses often had their own internal IT teams, outsourcing small elements of their operations, from a one-off project to a specific area of security, to a third-party.
Post pandemic, the motivations for using an external IT service provider have changed dramatically. The last year or so has seen outsourcing become essential to most organisations’ operations and wider business strategies.
A new generation of outsourcing partners are helping deliver the enhanced service levels and top and bottom-line improvements that businesses need in a post-pandemic world.
Here are six reasons why:
1. Speed of change
Most organisations are transforming at pace, to meet the needs of their clients and win market share. The rate of change means that many IT teams cannot keep the lights on from an IT operations perspective and handle the volume of strategic and systems focused projects that are thrown their way.
In-house IT teams are often much better focused on delivering strategic projects, while a trusted IT partner manages day to day IT operations as an extension to the team.
2. Talent shortage
The worldwide shortage of IT talent includes the UK. This has led many organisations and service providers to outsource overseas to meet demand.
The pace and volume of change in terms of transformation projects post-pandemic, along with a lack of new IT sector talent has created a crisis. There were more than two million UK job vacancies in tech in 2021, more than any other labour area.
3. Security
Businesses face a perfect storm of rapid transformation, skills in global shortage, and a fast-growing cybersecurity risk landscape.
IT teams within organisations are seeing pressure from all sides, which is a tough place to be. Many are leaning on their IT service providers to take responsibility for elements of cyber security, be it day to day security operations, compliance, or governance overlay. This gives an organisation comfort that a third party is providing checks and balances and is making sure that what needs to be done from a security perspective is done.
4. Too complex
The race to the cloud and between cloud, the rise of cyber-crime and swathes of transformation projects have made IT environments complex. Arguably more complex than they were prior to the cloud boom. However, most IT departments have not had the budget, talent, or experience to keep up with the demands placed upon them.
Partnership-focused IT service provider relationships, with the skills and experience these bring, help to augment their own.
5. Enhanced value
Many older, larger IT service providers have usually delivered flat cost savings based on labour savings. This type of flat service outsourcing, if done correctly, will realise straightforward cost-savings, especially as talent and experience wane. However, a new generation of dynamic service providers are helping businesses to not only control costs, but also enhance their operations, deliver strategic initiatives, boost their digital transformation capabilities, introduce automation, and Lean initiatives.
6. Competition
Local, national, and international competition has amplified in most sectors. The largest value gains now are typically driven or supported by some form of digital transformation. This had led businesses to lean on IT service providers to keep operations secure and available while the IT team focus on business and digital transformation projects.
Whichever way this use of external and internal IT support is married, augmented teams are invaluable in the current national and international business landscape.
Optimising manufacturing operations isn’t always easy, but it can be achieved with the right IT Solutions.
Manufacturing businesses are typically the best at seeking out efficiency and productivity in their operations, particularly on the shop-floor. However, many still do not apply the same LEAN principles to the rest of their operations, and that can mean the optimisation of processes is more challenging because of a lack of consistency throughout the business.
Systems and process analysis, and automation can be used throughout an organisation to drive down inefficiencies. IT is certainly an enabler of an efficient and well-performing optimisation.
As QuoStar’s Robert Rutherford was recently quoted in the Manufacturer: “Finance operations, for example, are often very bloated, but IT can facilitate outsourcing or offshoring, not only reducing costs but also allowing the process to become quickly automated to a good extent.”
What types of IT solutions and services can help with Optimising manufacturing operations?
Historically, manufacturers were always at the forefront of technology. This has in many ways meant that they experienced the falls and disappointments that come with testing cutting edge solutions. However, technology systems have also been driving results for manufacturers in some areas – such as IoT, cloud services and CRM.
Internet of Things (IoT)
The Internet of Things (IoT) has certainly given advantage to manufacturers both on the shop-floor and within their products on customer sites – by helping in support and maintenance, but also in querying big data for insights and value. It’s driving decisions around productivity, wastage and research & development to deliver wins across the board.
Cloud Services
Cloud services are also still extremely valuable to manufacturers. Although many still keep heavy processing in a private cloud, the public cloud (particularly AWS and Azure) allows operations and development to flex, trial and scale-up (and scale-out) without the traditional costs and complexities of big kit in the server room. The pandemic has heavily accelerated change. Customers have demanded faster innovation, more data and information, greater integration, and increased security.
CRMs
CRM systems have moved on significantly and its greatly improving the service manufacturers are able to deliver to customers, whether it is on managing expectations, delivering value or collecting relevant information. They can also drive an increase in sales in terms of new business wins, cross-sales and real-engagement with marketing automation.
Big CRM projects were historically associated with large capex costs. However, now they virtually all come in a cloud-based delivery model on a price per user basis.
Digital Transformation Road Mapping & IT Consultancy
QuoStar specialise in IT solutions. We can help with Digital Transformation Road mapping, as well as offering IT Consultancy services. Don’t with QuoStar you also have access to a CIO Service too!