Small IT department have many challenges supporting in-house private data centers because they don’t have the resources with expertise required in all technologies. This hinders IT professionals from being able to focus on strategic goals of the business. Most small to medium size companies have chosen to move to a cloud based managed services model. Managed service providers handle the everyday maintenance and daunting tasks that allows IT professionals to be productive and work efficiently. “Organizations that engage a managed services model can transfer risk to the service provider, leverage provider flexibility and grow without hiring additional employees” (Gidwani, 1). Our organization would be well suited for a cloud hosted managed services model. Cloud based managed solutions provide specific areas of expertise, higher availability, higher return on investment and lower total cost of ownership than our current in-house technology.
The model of having in-house IT support has proved to be ineffective for most organizations under 200 employees because the technology, knowledge and resources just aren't in place for an internal person to successfully manage all IT services (Howe). The size of our company does not require a large IT department. It would be inefficient for us to hire employees with expertise in specific areas of technology to properly support the current onsite technology. The IT department should be providing a service, and focusing on the strategic initiatives of the company instead of the everyday maintenance of the infrastructure. We are currently spending an excessive amount of time dealing with troubleshooting and menial tasks instead of projects to support the core business. Cisco’s brochure entitled Managed Services Intelligence – The Benefits of Out-tasking states, “Out-tasking network management to a managed services provider is more than a technology solution. Rather, by reducing costs and freeing up the IT staff to focus on the core business, managed services can play an important role in a company’s business strategy” (Cisco.com). As the managed service provider handles the everyday maintenance and firefighting, our current IT staff can work with the business stakeholders by focusing on projects that meet the core business initiatives. We should rely on vendors with the required expertise to deal with systems to keep the business running.
Managed services have many advantages such as reducing costs and allowing the IT department to focus on the core business initiatives. According to the article, 10 Benefits of Managed IT Services, managed services increases the company’s productivity while lowering costs, as well as provide higher levels of support and availability (Directive.com). The service providers can provide their customers with best practices for each area of technology offered and are proactive instead of reactive (4). Our current structure, we tend to be "fighting fires", which is causing downtime to our customers, making them frustrated, inefficient, and unproductive. A service provider can take over the critical tasks that our in-house IT department doesn't have the expertise to handle (14).
The managed services model is much more efficient for us than the staff augmentation model. Small to medium sized companies can’t fully utilize an IT staff with the required expertise to keep up with the day-to-day maintenance, problems, and technical support. With a managed service provider, we can get all of the benefits of having an in-house IT department without the cost of additional IT Staff. The essential difference between the two models is that under a managed services model, the provider is committed to delivering an outcome at a defined price versus an input as under the staff augmentation model. By its nature, staff augmentation represents higher labor costs (Cgi.com). Utilizing the managed services model will increase the productivity of our current IT staff and allow us to focus on projects that are aligned with the business needs.
There are a lot of drawbacks to hiring a full-time person with expertise in specific areas, which is leading more companies to adopt the managed services model. Some of the risks are employee vacation/sick time, a single point of failure if they are not compiling documentation on the infrastructure, and knowledge gaps if they aren’t sharing knowledge with their counterparts (Howe). “But complacency is the enemy of progress, and too often IT pros with a modicum of ‘secret knowledge’ hold their employers hostage to it. They cite slippery reasons for security, best practices, laissez-faire and hand-waving in order to prevent useful changes from happening” (Shields, 28). This is common with employees that have the “job security” mentality. In this case, when the obscurant Systems Administrator takes time off for vacation or resigns, the other IT members do not have the knowledge required to support the business. If a critical system goes down, it can cause countless hours or days of downtime and a lot of money lost. This is a huge risk to the business and can be a major impact to production. With the managed services model, there is always a team of IT professionals that have the knowledge and expertise of the systems and it will be fully documented. A managed service provider can also implement a disaster contingency plan as well as host a second datacenter in a separate location.
Cloud hosted managed services will allow our IT department to focus on the organization’s core business initiatives. A great article to reference is Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls which states:
Cloud Computing allows organizations to focus on their core business and abstract responsibility for what are essentially commodity services to a third party. It is the contention of the author that IT departments should be performing highly strategic work - basic maintenance of infrastructure is both a negative drain on their time but also arguably something that is better achieved by highly skilled specialists rather than the generalists that IT staffers tend to be. It has even been estimated that 80% of IT expenditure goes to simply “keeping the lights on” for an organization (Kepes, 10).Our customers want to come in, “turn the light on” and everything just works. In our current IT Services model, this isn’t happening. It is making our customers frustrated and unproductive. Our IT department is also working inefficiently since we are always fighting fires in order to “keep the lights on”.
Cloud hosted managed solutions are the best solutions for small and medium-sized businesses. As the price of storage and bandwidth continues to drop fast, Cloud-based services are becoming more and more attractive to small and medium-sized businesses (SMBs) which are seeking to reduce licensing costs, avoid recruiting IT staff and focus fully on their core responsibility – growing the business (Gfi.com). The total cost of ownership of cloud based managed solutions is much lower than hiring additional staff. Not only does the total cost of ownership justify moving to the cloud, but also the increase of productivity of IT staff and our customers.
There are some drawbacks to moving to a managed hosted solution. Obviously, proper research is required to obtain a good managed service provider. The IT department must properly assess the managed service provider’s staff, certifications, security, reliability and background. There are also reliability worries and it will take a lot for some IT departments to feel comfortable enough with their system’s uptime to hand them over. IT professionals also have the feeling of losing control and it may be hard for them to surrender control to a third party (Marshall). The mentioned drawbacks are more of a culture adjustment or fear of losing their “job security”. In addition, there are valid concerns of data security. Not only is it important to select a vendor that has high reliability statistics, they also must be in compliance with any required security regulations that the business must abide by. It must be stressed that security is a shared responsibility between vendors and the business. While vendors have an obligation to ensure datacenters are built to the highest level of reliability and security, it is also incumbent upon users to ensure they use best practices in areas they have control over, such as the utilization of firewalls, strong passwords and employee vetting, which are beyond the control of the cloud computing vendor (Kepes, 15). Although there are a few concerns of managed hosted solutions, the benefits certainly outweigh the risks.
With in-house solutions, IT staff doesn’t always have the company’s best interest in mind and can result in technology being prioritized over business goals (Shields, 28). A good example is the multiple times our Exchange email server went down. Exchange offers multiple, overlapping high availability technologies. Our IT staff is lacking the expertise in this area. A cloud based managed service provider has the expertise to implement this service and can potentially do so at a lower cost (Shields, 28). There are many companies implementing Microsoft 365, Exchange, and Lync online as managed hosted services. Not only are the costs lower, we must factor in what it cost the business when systems are down. We also have a myriad of technology sitting in our datacenter, costing thousands of dollars, that our staff doesn’t have knowledge to utilize. It is clearly a “technology playground” rather than a benefit to the company. Not only small to medium sized companies are going the cloud based managed services route, but also larger companies in order to be more profitable and competitive in the marketplace.
In conclusion, once a qualified, reliable managed service provider is established, we will see an increase in efficiency, reliability, and productivity, not only from our IT department, but also from all employees in the organization. In addition, the proactive nature of the managed services model can alleviate a tremendous burden from us, so we can do much more with less, and will enable us to schedule resources for projects since we won’t be fighting daily fires, but preventing them (Simpson, 13). It also allows our IT department to focus on the core business activities while receiving a higher quality of service with improved efficiency and access to global talent pools as well as cutting edge tools and best practices (Gidwani, 11). We will reap the benefits of utilizing the expertise of professionals, align IT services with business initiatives, and satisfy our customers, all with a lower total cost of ownership.
Works Cited
"Managed Services Intelligence – The Benefits of Out-tasking”. Cisco.com. Cisco Systems, Inc, 19 Feb. 2007. Web. 2 Mar. 2014. <http://www.cisco.com/c/dam/en/us/solutions/collateral/enterprise/managed-services-portfolio/net_brochure0900aecd805ddd9f.pdf>.
"On-Premise VS. Cloud-Based Solutions." Gfi.com. 2010. GFI Software. 11 Apr. 2014 <http://www.gfi.com/whitepapers/Hybrid_Technology.pdf>.
"Why Managed Services and Why Not Staff Augmentation?" Cgi.com. CGI Group Inc., May 2010. Web. 15 Mar. 2014. <https://www.cgi.com/files/white-papers/cgi_whpr_81_out-tasking_vs_outsourcing_e.pdf>.
Gidwani, Juliana. "Transitioning from a Staff Augmentation Model to a Managed Services Model." Neoadvisory.com. Ed. Atul Vashistha and Eugene M. Kublanov. Feb. 2007. NeoIT. 12 Apr. 2014 <http://www.neoadvisory.com/PDFs/Whitepapers/OIv5i02_0207_Staff_Augmentation.pdf>.
Howe, Brendan. “IT Outsourcing: The 8 Secrets to Eliminating the Firefighting Approach to IT Support Without the Overhead of Full-Time Staff.” TDCNet. Kindle.
Kepes, Ben. "Moving Your Infrastructure to the Cloud: How to Maximize Benefits and Avoid Pitfalls.” Rackspace.com. Diversity Limited, 26 Mar. 2013. Web. 2 Mar. 2014. <http://www.rackspace.com/knowledge_center/whitepaper/moving-your-infrastructure-to-the-cloud-how-to-maximize-benefits-and-avoid-pitfalls>.
Marshall, Johnny. "Managed Services: The Pros and Cons." Bdaily Business News. 25 May 2012. Web. 15 Mar. 2014. <https://bdaily.co.uk/advice/25-05-2012/managed-services-the-pros-and-cons/>.
Shields, Greg. "14 Reasons to Fire Your IT Staff." Redmond. July 2013: 28. Print.
Simpson, Erick. “The Guide to a Successful Managed Services Practice: What Every SMB IT Service Provider Should Know.” Garden Grove, CA: Intelligent Enterprise, 2006. Print.