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Why Outsourcing is the Smart Move in the Digital Age

29th March 2018

Written by Origin IT

The rapid digitisation of business and the growing need for cybersecurity are fuelling confusion around how to best invest in emerging technological capabilities. The fact is, you can’t decouple these pressing market needs from one another. They are inextricably linked.

“Cyber security risks are business risks,” IDC New Zealand research director, Louise Francis, said in a recent article. “CEO’s and CIO’s are becoming acutely aware that they will be challenged to maintain their enterprise’s digital vision, while also addressing increasing security concerns.”

The complexity of doing business in the digital age means companies are grappling with more questions, threats, and capabilities than ever before.

How do I stay one step ahead of evolving digital technologies? How do I maintain our core capabilities while fostering innovation? How do I do all of this while protecting our information, data, and knowledge?

And finally, the age-old question: Do I build these IT and security capabilities in-house (insourcing), or do I use a managed service provider (outsourcing)?

Keep your eyes on the prize

As the twin imperatives to innovate while staying secure grow stronger by the day, many organisations are wondering whether they need to build large-scale in-house ‘IT shops’ to take control of these business-critical functions. However, this approach inevitably detracts investment and focus from their core business.

Successful disruptors usually look to procure non-core business activities ‘as-a-service’ so they can keep their eyes on the prize. This not only allows them to focus on what they do best, it’s also more flexible, predictable, affordable, and comprehensive.

Origin Group CEO Michael Russell says the businesses he works with are looking for more freedom to focus on innovation, the ability to scale easily, better visibility across their infrastructure, and improved cost transparency. “Most importantly, they’re asking, how do they reduce business and security risks to ensure they can realise their digital strategy? They’re looking for a one-stop shop that provides a comprehensive portfolio of services.”

Russell said traditional reasons for insourcing - such as the perception that ‘doing it yourself’ keeps costs down and affords more control to prioritise and direct resource activities - don’t hold up in 2018. “These perceptions are fast being surpassed by the reality of the demanding requirements needed and the reality that the cost-value equation, more often than not, just doesn’t add up.”

Weighing up the options

Russell said when he has conversations with New Zealand businesses who are giving consideration to insourcing, the issue ultimately boils down to one question. “Can they deliver to the same level as an organisation that 100% focuses on these services as their core business? It’s hugely expensive to build in-house IT and security capabilities, especially in our rapidly evolving, disruptive world. It’s also extremely difficult to establish the knowledge base, support, and experience that comes with a company that is wholly dedicated to IT.”

In order to create and maintain a competitive advantage, businesses need to be at the cutting-edge of technology. In 2018, investing wisely in IT and security is essential to supporting digital transformation and innovation.

If you’re still working through that process, here are some considerations to help guide your decision.

Insourcing vs Outsourcing: 10 considerations

Ask yourself which option - insourcing or outsourcing - affords your business more:

  • Freedom: Which option frees up more time and allows you to focus on your core business?

  • Control: Which option makes your business more agile and scalable in response to growth and disruption?

  • Expertise: Which option gives you access to the best advice, information, software, toolsets, and experience?

  • Accountability: When things go wrong (and they will), which option will take greater responsibility for making them right again?

  • Continuity: Which option provides 24/7 monitoring and support, no matter who is on holiday?

  • Visibility: Which option provides regular, advanced reporting, data, and analytics to support your business decisions?

  • Efficiency: Which option delivers the most value for time and money (man hours vs automation and specialisation)?

  • Simplicity: Which option creates less work and stress for you and your business?

  • Affordability: Which option is cheaper both in terms of set-up and ongoing costs?

  • Predictability: Which option charges a fixed monthly fee (no surprises or hidden costs) so you can budget accordingly?

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