The Outsourcing Question

Here’s how to decide between keeping everything in-house and asking for a helping hand.

By Jamie Lendino

Darryl Milczarek is the accounting manager for Equipment Maintenance Services, and industrial repair company with branches in the U.K., Australia, and North America. The company decided to switch to External IT (www.externalit.com) for their IT infrastructure. Milczarek suggested that no one should buy a single file server until they’ve investigated the cost of owning that file server versus outsourcing it. “We now have zero file servers instead of the 13 we had only 15 months ago; It’s incredible.” Milczarek said.

According to Milczarek, because servers age, the cost of ownership is too high when you factor in the pain of having to work through Active Directory, maintain users, and handle patches. For his business, outsourcing is simply the best way to go.

Many companies face big decisions when expanding their IT departments, or creating one in the first place. Should you hire employees in-house? Or should you contract part, or all, of your IT needs to an outside company?

The New IT Landscape

In the 1990’s, it was commonplace for workplace machines to run applications locally on the desktop. An average computer workstation in the financial industry, for example, would have applications tapping into various services for stock quotes and market research. Many larger companies had an IT team on staff to maintain these applications and prepare desktop PCs according to custom company builds.

Today, customized applications run through the company’s local network, and individual workers access each program through their Web browser. Consequently, the focus has been directed away from the machines themselves. Outsourced IT departments can walk individual workers through whatever issues their PCs might have. This means that IT costs are lower than they would be if you needed people on the site.

This shift is especially beneficial on the mobile side. A company can purchase laptops knowing that workers only need to connect to the Internet in order to keep working. Employees away from the office can access critical data from their laptop or smart phone without having to carry a specialized build of applications on their devices.

Outsourcing vs In-House

If your employees are using their machines for standard applications, such as Microsoft Office or e-mail, a company can purchase new machines and get up and running relatively quickly. If you need customized applications, or would like to store everything on centralized servers, outsourcing begins to make more sense. Often this logic holds true regardless of the size of the company, though if you have less than 15 or 20 employees, the overhead involved with outsourcing can be too great.

“We researched it and determined that outsourcing everything except for the physical data lines made sense to us”, said Milczarek. “It also helped us trim down our compliance costs for licensing. Every new device we buy—a thin client, a Pocket PC, a desktop, a laptop—has just and operating system and way to get to the Internet. It’s $250,000 a year in true savings over the cost of doing it ourselves.”

“For us it’s the 24-hour monitoring.” Said John O’Malley, president of John Burns Construction Company, a 100 year old firm with offices in Chicago and Dallas. Each office has 15 employees, plus field workers who go out on construction jobs. The company outsources IT to Kent Network Solutions (www.kentnetworksolutions.com). “The old way was showing up in the morning, finding out that the server was down, and then having to wait for a reboot or to look into the problem further,” said O’Malley. “If something goes down now, [Kent Network Solutions] is immediately notified. They can access our servers remotely, and have the problem resolved before we arrive in the morning.”

Milczarek used to be the go-to person for computer issues of his company. Now someone at External IT will remotely control an employee’s PC and assist him or her with the problem. “Those things use to eat up my day. ‘My printer is gone,’ ‘I can’t scan,’ ‘How do I hook up the camera,’” Milczarek said. “Now when [employees] click on the request support button, within two minutes their phone rings, and they’re taking to a live person who walks them through the issue.”

Departments without Delays

For Equipment Maintenance Services, one important benefit of outsourcing IT is the amount of time it saves. “When we hire a new person and give them a device, it takes me 90 seconds to set them up with a username and password,” Milczarek said. The other selling point of outsourcing is the surprising amount of control over what applications employees can access. “They don’t have the ability to add things to their system. We no longer log trouble calls from people who downloaded something and destroyed their computer.”

O’Malley’s 30 office-bound employees use their machines for estimating, accounting, and invoicing, as well as company e-mail and critical “utility locates” for field construction. The field employees also have access to their e-mail while out on jobs. “Last year I was able to check my work e-mail while in Africa,” O’Malley said. “I was able to get in touch with people I couldn’t have otherwise.”

For employees that really need mobile access, Milczarek’s company buys them Pocket PC phones with Outlook Mobile and access to the company network. “Why invest in four times the cost of the thin client in a laptop for someone who already has a computer at home?” asked Milzarek.

“If they have a Windows Mobile 5.0 device it’s always up to date.” Said Milczarek. “I’ll get an e-mail and it will hit my Pocket PC before it reaches my desktop.” Employees access Word documents and Excel documents on the road with Verizon and Sprint, wherever there is broadband coverage in a large area. “They’ve got all of their work with them in their shirt pocket.” He said.