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Live within your means

Aubrey Christmas | Jan. 20, 2010
We must cast off the temptation to splash out as the economy picks up.

Here at the Employers and Manufacturers Association (Northern), we have successfully managed to integrate aspects of outsourcing by moving all our main infrastructure hardware along with critical application systems to virtualised data centres. The benefits are operational cost savings in terms of connectivity costs, greater redundancy, stability and reduced downtime.

Outsourcing gives me a number of options on how best to run my department. I retain a core staff with the skill set to manage the day-to-day operation, along with the flexibility to engage further assistance either on a contracted or casual basis.

I liken it to a pendulum that swings high during the life of a major project and swings back once the project is over. The benefits being the business is not left trying to find work or make up work for employees to do at the conclusion of a project. On the other hand, the contracted help can plan their next move in advance.

Outsourcing is a cautious move tinged with excitement, as we strive not only to make the advantage line, but also to come to terms with what it means to live within our means.

According to outsourcing advisory firm TPI, information technology and business services save on average 15 percent a year, substantially lower than over inflated estimates as high as 60 per cent.

However, TPI also suggests outsourcing will continue to grow as corporate takes an axe to operational costs. In its "Outlook for the Global Outsourcing Industry for 2009" report TPI stated: "Coming out of the recessionary markets in late 2009, we will find a strong global outsourcing industry with four to six large, dominant providers that will provide resiliency to the ecosystem that services the needs of major corporations. Ultimately, that ecosystem will service the needs of middle-market buyers as well."

So what the figures are saying is like it or not, outsourcing has staked out some legitimacy in the local marketplace and has produced quantifiable bottom line results that have gained resonance within our industry.

That brings me back to my original point about why I have adopted outsourcing in my IT strategy: it's about living within our means and outsourcing offers the opportunity to do that.

We haven't signed a blank cheque and handed over all the organisation's key functions, but we've selectively sourced the expertise we require to operate an efficient service to our business; while at the same time providing comfort to our key stakeholder -- our colleagues -- that we have the capability onsite to manage the core functions of the business.

The spectacular failure of outsourcing arrangements was highlighted in October this year when an IT outage crashed Air New Zealand airport check-in systems, as well as online bookings and call centre systems, affecting more than 10,000 passengers and throwing airports into chaos.


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