To say the pandemic has been a disruptive force in the world of business would be understating it. Over the course of the past eighteen months, businesses of all shapes and sizes, spanning all industries, have had to adapt and evolve in order to keep things moving. The sheer pace of digital acceleration that some businesses have undergone just to carry on serving clients and customers is almost too rapid to comprehend. If McKinsey’s 2020 report is anything to go by, a significant number of businesses out there managed to achieve a decade’s worth of digital transformation in just three months at the start of the pandemic, throwing their carefully curated strategies for gradual cloud adoption out of the window.
This has forced businesses into a sink or swim scenario, where they must follow through with their decision to scale up digitally, ensuring they have the support and security in place to make things work long-term. That’s led many to seek out external IT support, tapping into expertise that they simply didn’t have time to source on their own. According to a recent report by NNT, more than 45% of global corporations are now planning to outsource to a managed service provider in the next eighteen months. The biggest factor appears to be security, with more than 57% of companies citing security risks as the number one challenge when it comes to managing their IT in-house. With cyber threats like phishing and malware campaigns all becoming more common during the pandemic, it’s understandable that businesses would want the peace of mind that external support can bring. But the question many businesses forget to ask themselves is, what should that support look like? Outsourcing has become this catch-all term, but businesses that take the time to understand the nuances on offer will land much greater benefits as a result.
Managed services versus staff augmentation
Things aren’t as straightforward as they first appear when it comes to outsourcing IT services. There are two primary models that businesses often end up pitting against one another in a long list of pros and cons. The first model is the managed services approach. This is probably the most popular form of IT outsourcing, whereby a company outsources its entire IT infrastructure for a third party to manage. That third party can assume control of everything from IT staffing and day-to-day management, right through to executing digital projects and planning IT upgrades. It’s ideal for businesses who don’t have the time, budget, or scope to maintain their own in-house IT department and would rather focus all of their efforts on their daily operations. In this regard, it can be highly efficient and very effective, allowing companies to almost take their IT for granted and instead focus on running their business.
However, taking the managed services route is not with its drawbacks. For one, businesses that take this route will lose a great deal of autonomy when it comes to their in-house processes, making project management and product delivery more problematic. Handing over all technical processes to an IT firm can also be cost-prohibitive when compared to doing things in-house.
The second model is the staff augmentation approach. Staff augmentation allows a business to temporarily tap into skilled specialists as and when needed, supplementing and supporting their own in-house team. Instead of investing permanently in a team of highly-skilled in-house personnel, a business can have a smaller core team and simply draft in support from a much wider talent pool when the time is right. This approach is good because it allows businesses to retain full control and autonomy over their processes and projects, giving them greater agility and freedom.
However, detractors from the staff augmentation model would say its short-termism is a weakness, and businesses that require regular IT heavy-lifting would be better off with their own dedicated team. It can also require hefty management and HR resources that a small to medium-sized business might struggle with.
Why outsourcing isn’t the binary decision you think it is
What many businesses don’t realize, and what a lot of consultants fail to mention, is that the decision to go with managed services or staff augmentation isn’t as black and white as it seems. An increasing number of businesses are opting for a hybrid model that blends the two approaches according to their own specific needs. Businesses have been under increased pressure to adapt since the beginning of the pandemic, and there’s a looming sense of uncertainty even now as we approach the end of 2021.
A hybrid approach to outsourcing can help businesses to structure their finances in a more manageable way, setting the parameters for a managed services provider to step in and assume control over some aspects of the IT real estate, while still investing in specialists and experts to augment that service and provide additional input whenever it’s sensible and affordable. This approach also gives businesses the option to tap into a global talent pool rather than put all of their eggs into the same IT basket as they would if they opted to go 100% down the managed services route.
We already live in a world where hybrid working has become normalized, and hybrid cloud solutions are the most popular form of cloud migration. Perhaps now is the time businesses should be taking advantage of hybrid outsourcing when it comes to their IT functions too? The best of both worlds is possible; businesses just have to know where to look.
Salim Khouri, Director of Solutions Engineering, Expereo