A look at outsourced IT – Managed Services

Small and medium business and not for profit organisations are moving to outsourced ICT or Managed Services in larger numbers that ever before.

This has become more noticeable in the last 2 years.

Why would this trend be happening and why has there been the increase?

One of the main reasons for moving to “as a service” type systems is the need to get more done with less money.

In most businesses expenses in the business can be defined as either a capital expenditure or an operational expenditure.

I am not an accountant but when it comes to capital expenditure it is usually a large outlay of money for a product that can be depreciated over a specific time period, prior to the purchase of similar equipment 3 or 4 years later.

Capital expense is a serious draw on business and especially on cash flow.

Operational expense is the utilisation of cash flow to pay a monthly recurring expense for a component of your business.

You get the same level of service or equipment but there is no huge investment.

To a small or medium business or not for profit organisation an investment in capital expense with the additional cost of technical support staff can be something that board members and management are reluctant to do.

This then creates a bigger problem of a capital investment with limited or no technical support.

As an owner, manager or board member you have to make a decision on how you will invest you organisations finances in new systems and technology that are going to improve the bottom line.

This is where Return on Investment (ROI) come into the equation.

The organisation needs to make sure that the ROI on large capital investments is returned as soon as possible.

So there you are, your organisation is now weighing up your next purchase, are you going to purchase it outright with in house staff, are you going to purchase it on lease with In house staff, are you going to purchase it with outsourced management or are you going to get the whole system, with technical support, training, management and monitoring from an outsourced provider.

One monthly fee covers the investment in where you want your organisation to go.

One single monthly fee that is now based on operational expenses.

The benefits of outsourcing your ICT does not necessarily end there, we have a client who purchases all of his equipment on an open lease, he upgrades all of his equipment in a yearly cycle, one year desktops, laptops and monitors, second year servers and printers and the third year infrastructure components.

He always has up to date equipment, he always has happy staff and he pays the same monthly flat fee that he has been paying for the last 8 years.

It has allowed him to budget and also increase his profits coming into the business.

Yes there are other arguments that you can apply to outsourcing your ICT!

The outsourced company does not have the same attitude to your business as would someone on staff, yes this can be true but a remedy for this is a tight service level agreement (SLA).

With an outsourced solution delivered by a reputable company you no longer have high wages for an in house ICT person, you have access to a number of skills and talents that you may or may not have on staff, you no longer have OH&S problems, super problems, where to put staff problems and best of all you have a single monthly fee for all of the above.

Additionally you have access to high end technical support and advice when you need it.

With the right SLA you should also have access to a competent IT manager, business analyst or CIO for your business and the ability to engage in discussions on YOUR business requirements.

There you have it, your turn to weigh it up and look at a better way to support your business ICT requirements.

Please comment on what you think?

Roger Smith is the CEO of R & I ICT Consulting Services, Amazon #1 selling author on Cybercrime, author of the Digital Security Toolbox and author of the SME Digital Security Framework.   Rapid Restart Appliance Creator.   He is a Speaker, Author, Teacher and Educator on cybercrime and how to protect yourself from the digital world. 

Roger Smith, is an educator. Teaching students at ADFA (UNSW) and showing them how vulnerable they are to cybercrime.

He is also CEO at R & I ICT Consulting Services Pty Ltd, an Amazon #1 author on Cybercrime and founder of the SME Security Framework. He is a Consultant who specialises in inexpensive and highly effective security strategies for small and medium businesses and not for profit organisations.

He has developed and authored the SME Security Framework and the Security Policy Training Course which are considered to be the definitive guides to helping SME's protect their organisation using the principles of Technology, Management, Adaptability and Compliance.