IT Insourcing Can Save You Money

There is a new trend in IT that is gathering momentum and quickly increasing in popularity among businesses in Australia and across the globe: IT Insourcing.  If you’re not familiar with this terminology, let us explain.

 

For many years, the trend has been for companies to outsource more and more of their necessary IT infrastructure, that is, to move infrastructure, services and functions out of their own business’ capabilities and externally source these capabilities from other companies.  For an example of outsourcing, moving your business’ files onto a cloud storage facility hosted externally when you previously kept them on your own storage devices would classify as outsourcing.

 

Sometimes it makes a lot of sense to outsource your business’ infrastructure, services and functions as mentioned with cloud storage, but also with emails and website hosting, and several other functions.  Sometimes big global IT companies like Google and Microsoft can offer services much more efficiently and cheaply than a smaller business which doesn’t specialise in these areas, and as a result of this, for many years the existing trend has been to outsource IT as much as possible.  However, there is a growing realisation among businesses that outsourcing isn’t always all it’s cracked up to be, as outsourcing greatly increases the complexity of your business structure, ongoing communication is problematic, your business is completely reliant on third parties and has very little flexibility as a result, and outsourcing can have serious negative repercussions such as major security breaches.

 

Due to the realisation of some of the difficulties of outsourcing, as well as disillusionment because of bad outsourcing experiences, there is a new trend in IT where businesses are realising that some of their outsourced infrastructure, services and functions may be better managed in-house, at a much lower cost.  In fact, some very big companies have gotten involved in managing more of their own IT, including Target and General Motors in the USA.  Depending on the specific needs of the business, making a few simple changes to insource can save a lot of money, for example managing your own hardware, telephones and technical support can often be managed more efficiently and for a much smaller cost in-house for many small, medium and large businesses.

 

We recently completed an insourcing project for a local legal firm.  This business decided not to renew their 3 year outsourcing contract in which they rented computers, server space, and a virtual PABX system (Private Automatic Branch Exchange, an automatic telephone switching system) for an annual cost of around $25,000 per year.  After analysing their requirements, we installed a NAS (Network Attached Storage, also known as a server), changed their 10 Mbps data link to NBN connection (National Broadband Network), and recommended a local telephone company to install a physical PABX system.  All data is now backed up offsite, and email is hosted by Office 365.  As a result of the changes we made, file browsing is much faster, internet browsing is faster, and total IT and telephone costs have been reduced by approximately 65%!  That is an enormous cost saving worth the time and effort to make the changes.

 

Insourcing more of your IT can have many advantages including:

  • Reduced IT costs
  • Tailored solutions more suited to your business’ specific requirements
  • Increased flexibility and agility
  • Increased control over your own IT infrastructure and processes, as well as gaining complete control over your Intellectual Property
  • Improved data security
  • Reduced business structure complexity
  • Improved communications and turn-around times for IT service, as well as improved performance due to increased understanding of internal business processes

 

If you’re interested in learning more about insourcing for your business before you take the next step, you can read more about it here:

https://www.paconsulting.com/insights/the-rise-of-it-insourcing/

https://www.laserfiche.com/ecmblog/companies-jump-on-it-insourcing-bandwagon/

https://www.sciencedirect.com/science/article/abs/pii/S0963868710000193

 

Could insourcing be an IT solution for your business?  It depends on your business environment, your capabilities as well as your specific set of business requirements.  While it makes sense to outsource functions such as website hosting and email to companies who specialise in these capabilities, outsourcing everything may not be the best solution financially as well as for the reasons listed above.  To investigate the insourcing options available to your business, contact us and we’ll discuss your business requirements.

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