Business growth. Executives and CIOs consistently struggle with this term, and depending on where your responsibilities lie, business growth will have a different ring to its name. While each company inevitably strives to grow in revenue, profits and market share, diverse departments face their own challenges. Some divisions aim to increase said growth and reaching their KPIs, but things are a bit different on the technology side.
If sales and marketing are meeting/exceeding their targets or perhaps the company is struggling with sustaining market share, then CIOs will face different challenges in many settings. From fast-paced acceleration to deceleration, the strain these stages will put on their budgets, plus the way they have to govern infrastructure and staff resources, CIOs face many tough decisions. In order to accommodate all stages of their company’s existence executives in all departments must stay nimble and reactive in managing and allocating their budgets. So, you might ask yourself, what is new here?
Commoditization of IT resources is in full swing as IaaS, SaaS and PaaS offerings allow businesses to leverage IT resources as commodities with little to no capital investment and utilize OpEx to gain financial agility. This is especially true for companies which use tech solutions to drive and support their business, but information technology itself is not always a part of their core business. Read up on my earlier take on CapEx vs. OpEx here. With the commoditization of IT infrastructure and CIOs moving away from investing in resources which they can use more or less with on-demand flexibility, we are gravitating staidly into the everything-as-a-service era. There are limits however to what, how and when businesses can or want to outsource parts of their technology stack. Not all things being equal depending on your location, vertical and size, such decisions should not be made on a whim, but should be a part of your long-term business strategy.
A decision of outsourcing IT infrastructure or to use third-party managed services has one very clear goal and that is competitive advantage. Strategists want to leverage such outside sources to gain an edge over their competitors. Having said that past experiences have thought us that outsourcing requires deep understanding of your own business, as well as having dependable partners, which brings us to the current change in outsourcing trends. The way businesses choose to outsource parts of their IT, including infrastructure and managed services, has been driven by the goals they want to accomplish. If your goal is to maximize the efficiency, results, access latest technologies, and drive changes quickly on the IT side while kepping your budget in check, then bringing a third-party partnership on board to handle your IT infrastructure and partially managing the technology stack will prove to be the only way to go in many cases. The choice of what services to outsource will depend on your core business and in-house competencies as well as your IT and business strategy.
Avoiding opportunity costs
The struggle with growing complexity and amount of systems and resources that need to be overseen in order to secure flawless daily operations is real. There are many tasks in daily operations which are vital to businesses existence yet contribute in no way to core business in the way of making money. They also add unnecessary burden to IT staff workloads; systems monitoring, patching or addressing security or performance concerns. Focus on tasks that can be taken care of by using commoditized solutions is counterproductive. Working with managed services providers will allow your staff to focus on projects that do add key values to your organization’s bottom-line. Management of routine tasks and leveraging third-partiy hosting architectural and maintenance expertise are key to avoidance of opportunity costs on your end. All resources that you dedicate towards key metrics of your business will pay out in increased innovation and response to market needs.
Proof of life
The ability to become proactive instead of reactive and shifting your IT department strategically from the keep-the-lights-on department to enabler of innovation is no small feat for most companies. There are lots of reasons behind this, from limited budgets and inadequate understanding of technology on the executive level to simply fear of bringing in outsourcing partners and losing control. The fact of the matter is that outsourcing does not equal losing control and please do feel free to quote me on this one:
“Outsourcing is not an indication of incompetency, rather a sign of strength and understanding of your business’ SWOT and as such strategically utilizing that knowledge to gain competitive advantage.”
Increasing demand for managed services and strategic outsourcing of parts of IT operations from SMBs and enterprises alike has contributed to organic growth of MSPs and contributed to assimilation of managed services into portfolio of international IaaS companies like SoftLayer, Rackspace, Peak 10, CenturyLink and PhoenixNAP. Additionally, managed services can and will help businesses with adoption of cloud and leveraging of hybrid IT solutions. I expect these trends to continue as the information driven economy cleaves path for new opportunities, partnerships and promotes agile and responsive business models as the way of future-proof concepts. Further adoption of the everything-as-a-service on the technology side is inevitable and will reward decision makers who understand their own companies just as well as the markets and environments they operate in and serve.
After all is said and done, the use of managed services and outsourcing makes sense where it makes sense: it requires solid agreements (SLAs) and understanding of your own strengths and weaknesses to apply these solutions in a strategic manner. Key drivers behind adoption of said services and adoption of commoditized IT are the ability to focus on innovation and keeping financial agility through investment avoidance, which in the end allow for strategic course corrections of your business in the digital age, where changes in behavioral patterns on the market come quick and pay out big to those who have the ability and resources to respond quickly to the market’s needs. The ability to act as a startup pivoting and responding quickly is now a competitive advantage to SMBs and enterprises alike; don’t get left behind.
About the Author
Martin Wielomski is a Manager of Business Development for the EMEA region for PhoenixNAP Global IT Services. He has years of experience in the Information Technology and Hosting industries and specializes in strategy development and international business, sales leadership and product management. He also writes for several international IT oriented magazines and blogs and advises about technology, management, customer relations, sales and international business expansion while leveraging human connection potential in his corporate strategies. Martin believes in lifelong learning and leadership through engagement, while maintaining realistic and down to earth people approach. He can be reached at:linkedin.com/in/martinwielomski