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Outsourcing, Insourcing, and everything in between

By Michael Smith, VP & CIO, American Academy of Family Physicians

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Michael Smith, VP & CIO, American Academy of Family Physicians

The IT industry today has never been more fortunate to be living in unprecedented times. Technology is changing at an increasingly rapid pace that can have even the most technical minds spinning. One of the areas with incredibly rapid growth is around infrastructure services. With this rapid evolution of new and different products and services, it affords organizations the opportunity to consider possibilities that even a decade ago didn’t exist. These various services can be catered to be on-premise, all-in cloud computing and/or hybrid environments; and position IT leaders today to be at a considerable advantage to select a menu of a la carte services that make the most sense for their organizations.

In the past decade, organizations have seen the rise of managed services at the data center level that include the introduction of Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and even Desktop as a Service (DaaS). With these various options, organizations can strategically plan how they want to utilize these services. However, with a smorgasbord of choices, the responsibility and importance of planning the how and why is of critical importance. It is best to consider a few items.

"If you are all-in and fully outsourcing, you will most likely save money in the long run with reduction of hardware and resources"

First, a few questions about your basic infrastructure needs. Is your IT team size large or small? Do you have the expertise in-house to manage the complex infrastructure environments? If you have a relatively small team or limited expertise to manage your environment, you may be a better candidate to consider managed services to outsource your infrastructure needs. Limited hardware investments along with less administrative burden would be a more cost-conscious approach to your organization. Many managed service providers have contracts that allow you to constrict or expand services as you need them. In other words, if your environment is constant with limited complexity, you may be a good candidate for a more straightforward limited managed services agreement in a shared computing environment. If your team is large or your environment is complex, and you want to invest in managed services, it would be recommended to focus on what is considered commodity-based services first. This would historically be email, front office management tools (i.e. Office 365) and/or more standard software platforms utilized by many companies. The ability to outsource these services many times can be more cost effective than retaining the resources within your own organization to do the same level of work. This all depends on the type of industry your organization is in or the level of security/compliance required that may not be standard across other industries.

Second, there are literally hundreds of providers and they all seem to do the same types of services. How do you navigate through this maze and choose the provider that is best for you? In my opinion, the best path forward is the tried and true method of reaching out to your networking contacts to see who they have worked with in the past and get a feel for their level of comfort. Since many companies have already made the leap, there are many experiences and testimonials that can easily be shared through blogs, networking sites, conferences, etc. However, your organization may make the decision to go the RFP route and evaluate several providers. Whatever method you choose, it is best to first map out what your final end-game is from an organizational perspective. For example, if your organization is moving to SaaS applications like Salesforce, WorkDay or other notable applications and platforms, you may want to include in your vendor research what data center providers these vendors partner with. Do they have a direct path into these SaaS applications or will their data center need to interact with other data centers that could impact reliability and performance? Although many providers say it doesn’t make a difference, we all know that the more hops that are required round trip will eventually impact your overall performance. It is just simple math. Two to three hops will always be more efficient than six or seven multiplied by the number of transactions that occur on a recurring basis.

Third, and for some companies the most important is what your budget can handle. Again, it starts with understanding what your end-game is as an organization. If you are all-in and fully outsourcing, you will most likely save money in the long run with reduction of hardware and resources, but your risk has exponentially increased as you no longer have overall control related to your organization’s assets. If your organization is considering a more hybrid approach, you have balanced the risk but will continue to have capital and operational investments depending on what remains on-premise and what is in the cloud (public or private). Hybrid provides the most flexibility to manage your comfort level with risk and for some companies may be the most cost effective or at least neutral related to current costs depending on the architecture of your environment.

As with any IT initiative, there is never a single answer or a single approach to providing solutions to your organization as there are many ways to the same result. Various options can provide more flexibility but can also be an albatross around an IT organization’s neck to know if the right decision has been made. The best you can do is choose the best option for your organization and your company’s culture to managing risk. Research and talking to other organizations is the best place to start your journey.

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