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Network & Systems Management Services

How big a staff, network or business do you need to find happiness in a network and systems management outsourcing relationship? That depends on your goals. Do you aim to fire IT employees and save buckets of money, or reassign them and start to fulfill those ambitious business plans that have been on hold? Do you have specialized services and applications? What's your tolerance for giving up hands-on, day-to-day control?

For the most part, big management service providers are not targeting small and midsize businesses because of the need to tailor services, which equals razor-thin profit margins. But it's only a matter of time before they lust after this potentially lucrative market segment. Be ready when their reps entice you with promises of money saved and efficiencies gained.

In "The Handoff," we offer advice on the implications of management outsourcing and tips on negotiating a contract. A key consideration: your people. It's ironic that those employees best qualified to manage the service delivery relationship and make sense of those daily exception and performance reports are the same people who would provide the best outsourcing cost actualization through their disemployment.

In "Teaming Up With the Right Management service" (page 40) we introduce the fictional TacDoh, which sells deep-fried foods and is looking to reallocate a portion of its IT budget to support business-focused development projects. Four management service providers--Net ProActive Services (formerly Bangalore Labs), HCL Technologies, iNOC and PerformanceIT--submitted RFI responses. Although we liked the service options presented, the money TacDoh would save wasn't even enough to keep it in canola oil.



By the Numbers

$350 billion: Overall worldwide outsourcing market

90%: U.S. companies that outsource at least one activity

$87 billion: IT exports by 2008 to India, which controls more than 85 percent of the overseas outsourcing market

30%: Outsourcing projects rated "unsatisfactory" by clients at the two-year point. Half of those companies identified bad planning as the cause of problems in their relationships

Source: Cutting Edge Information