* As branch locations grow, IT staffs need outside help to keep up with demand
With any type of business, leveraging the expertise of third parties is a necessity – whether it’s accounting, auditing, engineering, or printing. This isn’t to say that every company is outsourcing or should outsource the entire function. But more and more, we see collaborative internal/external efforts providing organizations with the extra “people power” they need when demands grow but headcount doesn’t.
This same philosophy is extending at a fast pace to IT. In the past, companies would either outsource or not. Now we find much more “selective” outsourcing taking place. Rather than handing over all of IT to a big outsourcer, such as EDS, IBM, or CSC, IT executives are sitting back and evaluating the big picture. They’re carving out specific pieces of IT, network, telecom, applications, etc., to third parties in a strategic way.
One of the big areas they’re pushing off to third parties is branch office management – and it’s happening very quickly. Consider this: One year ago, only 27% of organizations were using third parties to help manage their branch offices. Now that number has increased to 46%, according to Nemertes’ recent benchmark, “Building a Successful Virtual Workplace.”
We call the companies offering these services MSPs, or Managed Service Providers. They include different types of providers – carriers, traditional outsourcers, equipment vendors, resellers, virtual network operators, and systems integrators. What they all have in common is the ability to manage all or part of a customer’s IT infrastructure.
At the branch, we typically see companies using third parties in conjunction with the internal IT, network, and telecom staffs. They may use the third party for installation, Level 1 support, monitoring, and training. Internal IT, meanwhile, handles Level 2 and Level 3 support issues, ongoing maintenance, and strategic decisions.
They use the third parties for all different combinations of functions. Some use carriers to manage the switch/router, connectivity, and overall network performance. Others use an outsourcer to handle those issues, plus LAN and desktop support. And others might include an IP telephony vendor or reseller, for example, to manage the IP telephony application.
In any of these cases, the biggest driver is time – whether it’s time to deploy, resolve problems, train users, or upgrade. With only 18% of branch offices housing IT staff – and little growth projected for the internal IT team – it’s becoming very difficult for distributed enterprises to effectively manage the branch locations. And keep in mind that the number of branch locations at the average company is growing by 11% annually!
The biggest challenge is making the relationship with the third-party MSP fruitful. MSPs have become fairly proficient at pricing their services such that it’s more attractive to hire them than to hire internally (usually, that is). But there is more to the relationship than dollars and cents. How responsive is the MSP? What about service-level agreements? Do they have them, and if so how good are they? Does the MSP help with strategic decisions or provide input about new technologies that may help? Do you want them to do that? We’ll explore more of this next week.
