Case Study: Why Outsourcing IT is the Only Way to Go

Case Study: Outsourcing IT Is the Only Way to Go

MACPA Technology Conference 2010

Kelly Jennings

QUINCY CFO LLC

[email protected]

AGENDA

� Set the Stage

� Immediate Actions Needed

� Develop and Execute The Technology Strategy

� Summary

MACPA 2010 Technology Conference | 2

� Summary

� Questions

SET THE STAGE

The Company

� 20+ year old Consulting firm

� Headquarters in MD, but offices across US in major metropolitan areas

� Growth Plan is to expand to 2X revenues in 3 years


SET THE STAGE

Offices and Employee Count


SET THE STAGE

Offices and Hardware Devices


SET THE STAGE

IT Staff

IT Manager– Generalist

– 15+ years of exp

Concerns

1. Company demands high touch service.


1. Company demands high touch service.

2. Investments in education were not possible due to demands on time.

3. IT Manager had not honed skills for planning and time management.

IT ManagerSalary $90K

SET THE STAGE

Facilities/Server Room at Each Office

� Kitchen/Closet/File Room

– High rental rates

– Ideal office space is given to staff members

� Concerns


� Concerns

� Cooling

� Back up Power

� Not locked or away from general traffic

SET THE STAGE

Technology We Want to Explore


SET THE STAGE

Growth Staring Them in the Face: Offices & People

Growth From 72 Employees and 3 offices


and 3 offices

SET THE STAGE

Financial IT Commitment

Current Future

Annual($000)

Annual ($000)

IT Staff (1 staff)(Salaries & Benefits)

$115 IT Staff (3 staff)(Salaries & Benefits)

$325


Laptop/Server Lease Fees $90 Laptop/Server Lease Fees $145

Facility (Server Room) $10 Facility (Server Room) $25

Total $143 Total $495

Costs will increase over

300%

AGENDA

� Set the Stage



� Summary


� Summary

� Questions

IMMEDIATE ACTIONS NEEDED

Hire Some More IT Personnel

� IT Manager can’t manage the network if too busy performing Help Desk duties

� Monitoring servers became second to serving customers –face time!


face time!

� IT Manager is not able to be proactive, only reactive

� Employee satisfaction can only increase

IT AssistantSalary $45K

IT ManagerSalary $90K

IMMEDIATE ACTIONS NEEDED

Develop a Technology Strategy

� As a firm there was a strategy for many things other than Technology.

– 5-Year Firm Strategy

– Business Development Strategy

– Strategy for Expansion into new metropolitan markets


� Given the rapid change in Technology, a plan was needed.

AGENDA

� Set the Stage



� Summary


� Summary

� Questions

THE TECHNOLOGY STRATEGY

STEP 1: Who Is Internal Technical Leader

� Before you kick off the strategy process, who is your acting CTO.

� Make sure they are interested in this role, it’s going to be long road where continuity would be ideal.



STEP 2: Hire a Strategy Team

� Find Consultant

� Define deliverables (reference guide as takeaway)

� Set timeline


Investment in Strategy for Back Office Operations!

Didn’t have to hire F/T C-level talent needed for this one

defined task.


STEP 3: Define the Strategy

� Understand the business in order to:

– Set objectives (What is the goal of this process?)

– Set the Assumptions

– Set the Dependencies (What is this Strategy dependent on?)

– Define current issues (Derived from staff interviews)


– Define Technology Principals (Technology rules to live by)

– Provide Scenarios (Go forward options)

– Provide Recommendation

You now have a reference manual to refer back to

regularly and report against.


STEP 4: Adopt a Scenario

� Each Scenario ranging from internal IT infrastructure to Outsourced IT infrastructure was compared against our principals as well as these factors:

– Facility/Space

– # IT staff


– # IT staff with new IT Skills

– Financial impact on firm

– Scalable and Flexible

� ADOPTED: Outsource what makes sense and centralize the rest

With Management’s buy in, you now have a roadmap.


STEP 5: Interview IT Vendors

� There are tens and tens of vendors in the area that provide IT services

� Keeping in mind the full strategy and how deep it could end up, search for vendors that you can grow into

� Take the free audit of your network – but it can be time consuming,


choose only a finalist for this.

� The selection process could take months. Don’t burn bridges, you may need them next time.

� Important factor for me, as the decision maker, was the request tracking system (how are tickets generated, tracked, and resolved). I wanted access to that system – my employees would hold me accountable as the one that manages our vendor!

You now have a partner with enormous expertise as a reference to you.

(This process took me 3 months – start early.)


STEP 6: Host Email

� Email is our most important communication tool

� Email is a tool for data storage (employees with 5GB to 15 GB), don’t let them tell you you’re alone!

� Hosting email is a commodity. Some that host email are


getting out of the business.

� The transition was painful and not seamless (either time!)

Finally, the IT Team sleeps at night – we have redundancy!

(Implementation took 4-6 wks)


STEP 7: Outsource Server Monitoring

� Economical to install monitoring agents on our servers to communicate with a ticketing system about an issue

� Who follows up on it can be costly (remember you still have your IT Manager)


The system was PROACTIVE for us, and told us what to look out for!

Proactive ☺, a new word in IT for us

(Up and running in 2 wks)


STEP 8: Outsource IT Manager

� We could never afford the skill set available at IT firms; plus a jack of all trades will get bored

� IT is a deep and wide area (from engineers to designers), we may assume they know more than they do.Outsourced vendors have a staff of

system engineers, database


� This can be done with dignity a few steps prior to this one, when the Scenario and vendor are chosen.

system engineers, database administrators, exchange experts.

Their core competency is IT, so they invested in the training of their staff.


STEP 9: Outsource IT Assistant

� Now that IT Assistant reports to CTO, evaluate his/her success with execution now that you’re teaming with IT Partner

� Decision much harder than IT Manager, this person on front line day-to-day with employees

We now treat all employees the


� Are all employees getting similar service? Or is IT Assistant’s time off balance.

� Economics of outsourcing?

� Make sure there is a ticketing system, to keep your employees informed of their issues

We now treat all employees the same with offsite assistance.

There is a ticketing system for me to monitor.

Economical.Employees became more self

sufficient.


STEP 10: Consolidate Servers/Break Silos

� Assess the age of your machines?

� Are you virtualizing and maximizing the use of your machines?

� What is your DR plan? You may be able to afford one in


this transition.

� Remember it’s a utility, not rocket science

Our machines are 3-5 years old. Virtualization ensures you’re using all of

the machines power.We can have a DR plan that’s automated


STEP 11: New Emerging Technology

� Depending on your available resources throughout this plan, once your architecture is set, you can now start to implement these secondary IT needs

CRM IntegrateCRM and

Outlook

Smart-Internal

Google Search


Technology

Smart-Phones

Social Media

SEOShare-Point

Blogging

InternalWiki

The backbone is finally set for growth. (These are things you should keep in mind

in the early stages and design for.)

AGENDA

� Set the Stage



� Summary


� Summary

� Questions

OUTSOURCING IT

Is the Only Way to Go Because…

� If your decision is building a strategy, you now have a roadmap.

� Your core competency is not IT, get an IT Partner at a fraction of the cost of full time staff.

� IT Partner has best practices and all the tools.

� IT Partner invests in the right staff and development of those staff.


� IT Partner invests in the right staff and development of those staff.

� Your partner will be proactive, not reactive

� A fresh start allows you to take advantage of new technology (assume it will change every 3 years; build with scalable and flexible solutions)

� Make the right facility decisions to protect one of your most important assets, your Data

OUTSOURCING IT

Important Considerations…

� Who will own the equipment? You or the partner.

� Would you like your IT Partner to be close to your location?

� Do you want presence on site at your locations on a


regular basis?

AGENDA

� Set the Stage



� Summary


� Summary

� Questions

Documents

Case Study: Why Outsourcing IT is the Only Way to Go