Network Services: To Outsource or Not to Outsource? - Page 2

 By Beth Cohen
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Contractors or Consultants

Another more traditional alternative is to hire an outside company to send its "experts" to help with your systems support. They are generally on-site rather than in a remote data center or in their own facilities, and as far as your staff is concerned, they behave like employees. The advantages to you are that the contracting company takes care of the training and makes sure you have the services that you contracted for. For example, if one of the contractors leaves, the contracting company is responsible for finding a suitable replacement.

But as another of my students recently commented about outsourcing, "I was a consultant for many years. I always satisfied the customer and did my job to the best of my ability, but there was no ownership. I couldn't really care less about the company I contracted to. Why would I care? If they fired me or went out of business, then I would move to another company as a consultant. I had no desire to volunteer any information or document anything unless I was asked. My point is that having a great consultant does not fix the problem. It only fixes the symptoms. Consultants should only be used to augment the existing staff and not replace it." Also, the promised "expert" might not be any better -- or cheaper -- than someone you could hire directly.

Decisions, Decisions, Decisions...

When you are considering outsourcing, you need to look at your current in-house expertise and your budget. By all means, if you have expertise in-house, take full advantage of it, but if you don't, you may be forced to look outside. As companies continue to lay off IT talent, the pool of people who have the skills and training to support the network services might not be available in-house anymore.

Theoretically, the outsource service providers pass savings on to you in the form of higher quality services at a lower cost. That could work well if you limit yourself to a couple of key relationships, but the cost of coordination between multiple vendors can quickly offset any cost savings. Remember, the vendors are (hopefully) making a profit on their services, so if you are already running an efficient in-house operation, it might be cheaper to keep the services in-house.

Things to watch for:

  • Make sure that you have a contract that both you and the vendor are happy with. If the vendor discovers that they will lose money, they will want to renegotiate or renege.

  • Make sure you understand the level of service that you have bought. Read the SLA (Service Level Agreement) closely.

  • Check the company's references before signing with them.

  • Review the contract periodically to make sure you are continuing to get the service that you are paying for.


So does outsourcing network services actually benefit your business and save you money? The answer is, "It depends." If you do not already have the expertise in house, there is no question that taking advantage of the economies of scale and the special expertise of an outside company can be a real benefit, but the ROI (Return on Investment) is less clear if you already have good services and support in place.

If you continue to pay attention and monitor the quality of your service, you will find that outsourcing part of your network support services can be very rewarding, but be aware of what you are getting yourself into before signing on the dotted line.

Beth Cohen is president of Luth Computer Specialists, Inc., a consulting practice specializing in IT infrastructure for smaller companies. She has been in the trenches supporting company IT infrastructure for over 20 years in a number of different fields, including architecture, construction, engineering, software, telecommunications, and research. She is currently consulting, teaching college IT courses, and writing a book about IT for the small enterprise.

» See All Articles by Columnist Beth Cohen

This article was originally published on Feb 26, 2003
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