IT-as-a-Service: Save Money on IT Costs While Improving Quality and Service

In today's economy, companies are feeling increased pressure to reduce costs without sacrificing the level of quality and services provided by their IT departments. A recent survey by research firm Techtel Corporation found that overall technology spending has fallen drastically over the last four quarters and IT spending in the U.S. is expected to continue to decline. Although technology is a significant expense for most businesses, it has also been proven to increase productivity, reduce other costs and ultimately improve a company's bottom line.

Many companies are finding that it is simply too costly to maintain internal comprehensive IT departments. As a result, many CFOs are looking to "IT-as-a-service" - IT resources such as email that are accessed as services - to help lower the total cost of ownership and reduce downtime.

Technology is no longer a luxury, but a necessity for business success and it is critical to find a managed services provider that can deliver on the promise of IT service quality and efficiency. With more and more companies - small to medium businesses included - facing the challenges of finding a simple, cost-effective IT solution, following are some benefits to using the IT-as-a-service model.

An Enhanced Business Focus
Using IT-as-a-service allows companies to focus on running their business, rather than worrying about supporting their IT needs internally. In addition, the model helps companies to minimize IT risk and obtain technology peace of mind. Managed services providers can fully or partially manage the IT infrastructure for companies and they can either be a company's solitary technology source or can supplement a current IT staff. Possible IT-as-a-service scenarios include the management of:

• One infrastructure operation, such as disaster recovery;
• All infrastructure operations, including email, the network, security, servers, desktops, laptops and mobile devices; or
• All software, as with "software-as-a-service" or SaaS.

With advances in technology, especially the Internet, the concept of managing an IT environment from a remote location can not only reduce IT staffing needs, but can also give companies of all sizes the opportunity to leverage more sophisticated technologies than if they had to run the functionality in-house.

Lowered Total IT Cost
On the surface it may appear to be more cost effective to hire a consultant or a full-time employee for IT. CFOs often believe that hiring someone for a few thousand dollars a month as part of their staff will save their company money in the long run. In reality, however, this is often not the case. Having a full-time employee, or using an outside contractor on an as-needed basis (usually when there is a crisis) may actually end up costing business more in the long run.

In addition to the expenses associated with payroll, healthcare and other benefits are the costs associated with training. With the rapid advancements in technology, training IT staff is essential. With IT-as-a-service, training is no longer the company's challenge. The managed services provider ensures that the skills of their team are up to date, typically obtaining advanced certifications for Microsoft, Cisco and other technologies.

IT-as-a-service can result in tangible and significant IT cost savings. For example, one Washington DC-based association realized a cost savings of $250,000 per year in their IT infrastructure and support budget by switching to a managed services firm. This type of savings can go a long way toward investment in other areas of an organization or simply as a way to lower overall expenses in a tough economy.

Looking to a managed services organization to provide IT-as-a-service helps companies to avoid not only hiring internal IT staff, but also maintaining expensive IT infrastructures in-house. With IT-as-a-service, companies save money in areas such as staff, office space, upgrades, equipment and training.

Avoidance of Unpredictable IT Charges
With the IT-as-a-service model, organizations typically pay a fixed monthly fee, instead of fluctuating, unpredictable costs associated with the "pay as you go" external IT provider. This can be a much more cost-effective means of managing an organization's IT infrastructure, as no extra costs are incurred in the event that something goes wrong.

Achievement of Backup and Disaster Recovery Goals
In choosing IT-as-a-service, companies should evaluate the provider's security infrastructure. Physical security is the first layer of protection in shielding a company's mission-critical data and systems. If a company is outsourcing the management of its intellectual property, ensuring that it is protected from loss, theft and corruption is critical to the future of the business. Thus, security is one of the most important factors to consider.

Among the key questions to ask a potential services provider are:

• What physical layer of security is in place at its data center?
• Is there an authentication system for employees?
• Are there surveillance cameras?

In addition, the IT-as-a-service provider needs to instill the proper procedures and processes within their client's organization to prevent employees from accessing information for malicious purposes. Not having these procedures in place can pose a major financial and reputational risk.

Finally, providers of the IT-as-a-service model need to provide the highest level of data backup services to clients in order to avoid any loss of data. If the service provider does not back up their clients' data properly and have a way to access data if the company's system fails, there is little value in protecting it.

Improved Quality of IT
Because managed services providers are immersed in technology every day, typically they are better skilled in any one area of IT than most clients could ever be. Small to medium businesses have the particularly difficult challenge of having smaller staffs and limited infrastructure support, while still requiring high-quality IT services to remain competitive. Using the right IT-as-a-service model enables these businesses to access and use the same quality IT offerings as larger companies, but for less money.

IT partners can offer a wealth of technology knowledge and great resources. A company with its own IT staff is often stuck with just a single person or a very small team with limited expertise. In contrast, IT-as-a-service providers typically have teams of highly-experienced, fully-trained professionals who are experts across the technology spectrum, including e-mail, security, network, servers, desktops, laptops, and PDAs.

When a company hires its own IT staff, there are challenges around vacations, training and time off due to illness. IT-as-a-service provides around-the-clock monitoring and management, as well as coverage throughout the entire term of the contract. Vacations, illness and even off-hours coverage do not adversely impact your technology infrastructure or support levels.

Bottom Line
These days, it is difficult to predict the future of the financial markets and how that will impact companies of all sizes within all industries. Especially in such an unstable economic environment, budgets are under even more scrutiny. At the same time, in order to remain successful, your company cannot forego investment in areas such as IT that has proven to be a positive differentiator among competitors.

Considering that the use of IT-as-a-service can save your company significant costs, while helping you to remain focused on what you know best--how to run your business--what could be better? Your organization will gain technology peace of mind with always-on IT-as-a-service, and significantly reduce business risk in the process.

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