How to make firms more IT efficient
Many companies face the daunting challenge of efficiently operating their complex information technology environments. Enterprises continue to make strategic investments in new infrastructure to augment their existing legacy platforms while simultaneously managing the demands that both employees and customers place on these systems.
As a result, the process for making an investment decision about how to effectively and efficiently manage and operate this environment can be quite difficult. Here I will look at the challenges of managing an IT infrastructure in-house and the best available option for managing a technology environment.
Managing an IT infrastructure in-house
IT professionals face a number of issues in implementing and managing a company's computing infrastructure: How can an enterprise scale quickly to meet customer demands and sales goals? When does a company invest in technology given the risk that it may become obsolete? How does an enterprise leverage IT to support corporate business objectives? Even with a sensible IT strategy, many enterprises must integrate their infrastructures with legacy systems, expand geographically and develop the skills in-house to support these complex environments. Some of the challenges that enterprises must also address include:
- Deploying new technology quickly while containing the related costs
- Competing in an environment where rapid time to market and expanded geographic reach are critical to success
- Hiring and retaining skilled operations staff and deploying the right skills at the right time
- Providing a scalable, secure and highly available infrastructure that minimises costs while ensuring service quality
- Determining availability and operational requirements to meet customer needs
Businesses have two options for managing their IT infrastructures:
- Manage and support systems in-house, buying and controlling the assets
- Outsource operations and ongoing management of these systems to an outside vendor or service provider.
With the increasing complexity of technology, companies often find that they cannot efficiently manage their complex IT environments with in-house resources. Businesses struggle to find the right skill sets and ramp up quickly on new technologies. Managed services, or outsourcing, may be the answer.
Market drivers and enterprise challenges
Enterprises in almost every sector are facing five major challenges:
- Intensifying competition on price
- Declining customer loyalty
- Escalating operating costs
- Increasing technology complexity
Without clearly differentiated products and services, enterprises are having an increasingly difficult time competing on the value of their solutions. In response to these business pressures, many enterprises have sought less expensive offshore resources to reduce their costs of goods and services. In many enterprises, the IT and network staff who should play an integral role in developing leading edge applications are preoccupied responding to system failures or other performance issues. Gartner and other research firms estimate that internal IT/network staff can spend 70-80 per cent of their time reacting to problems.
The managed services alternative
Although the nature of the engagement may vary in terms of assets and staff, managed services from a third party alleviate many of a customer's burdens by taking over the operations – including management, monitoring, and maintenance – of systems and data centre infrastructure. IDC research shows that companies are increasingly turning to external vendors to manage their IT operations. Because of the challenges associated with operating and managing complex IT systems, enterprises recognise the benefits of turning over the management of their technology infrastructure to a vendor with the required skills and expertise.
In fact, IDC claims that in 2008 the IT services market was worth $1 billion in the UAE alone, a 29 per cent year-on-year growth rate. The issue is whether or not managed services is a good fit given a company's technology challenges and environment. Managed services can help certain customers overcome obstacles when implementing new systems or improving efficiency. Tracking the potential cost savings and efficiency gains from any services engagement depends on a number of factors, including the size of the company and the scope of services and technology involved. However, there are several benefits beyond potential cost savings, including the following:
- Ability to focus on core competencies
- Faster and higher-quality service and improved efficiency
- Access to new skills and technology
- Faster deployment of technology
- Greater flexibility
- The author is the CTO at Dubai-based Smartworld, a next generation ICT services provider. The views expressed are his own
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