Case Study: Why Outsourcing IT is the Only Way to Go
- 1. Case Study: Outsourcing IT Is the Only Way to Go MACPA Technology Conference 2010 Kelly Jennings QUINCY CFO LLC kelly.jennings@quincycfo.com
- 2. AGENDA Set the Stage Immediate Actions Needed Develop and Execute The Technology Strategy Summary Questions MACPA 2010 Technology Conference | 2
- 3. 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 MACPA 2010 Technology Conference | 3
- 4. SET THE STAGE Offices and Employee Count MACPA 2010 Technology Conference | 4
- 5. SET THE STAGE Offices and Hardware Devices MACPA 2010 Technology Conference | 5
- 6. SET THE STAGE IT Staff IT Manager – Generalist – 15+ years of exp Concerns 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 Manager Salary $90K MACPA 2010 Technology Conference | 6
- 7. 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 Cooling Back up Power Not locked or away from general traffic MACPA 2010 Technology Conference | 7
- 8. SET THE STAGE Technology We Want to Explore MACPA 2010 Technology Conference | 8
- 9. SET THE STAGE Growth Staring Them in the Face: Offices & People Growth From 72 Employees and 3 offices MACPA 2010 Technology Conference | 9
- 10. SET THE STAGE Financial IT Commitment Current Future Annual Annual ($000) ($000) IT Staff (1 staff) $115 IT Staff (3 staff) $325 (Salaries & Benefits) (Salaries & Benefits) 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% MACPA 2010 Technology Conference | 10
- 11. AGENDA Set the Stage Immediate Actions Needed Develop and Execute The Technology Strategy Summary Questions MACPA 2010 Technology Conference | 11
- 12. 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! IT Manager is not able to be proactive, only reactive IT Assistant Salary $45K Employee satisfaction can only increase IT Manager Salary $90K MACPA 2010 Technology Conference | 12
- 13. 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. MACPA 2010 Technology Conference | 13
- 14. AGENDA Set the Stage Immediate Actions Needed Develop and Execute The Technology Strategy Summary Questions MACPA 2010 Technology Conference | 14
- 15. 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. MACPA 2010 Technology Conference | 15
- 16. THE TECHNOLOGY STRATEGY 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. MACPA 2010 Technology Conference | 16
- 17. THE TECHNOLOGY STRATEGY 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. MACPA 2010 Technology Conference | 17
- 18. THE TECHNOLOGY STRATEGY 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 With Management’s – Financial impact on firm buy in, you now – Scalable and Flexible have a roadmap. ADOPTED: Outsource what makes sense and centralize the rest MACPA 2010 Technology Conference | 18
- 19. THE TECHNOLOGY STRATEGY 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 You now have a partner with enormous accountable as the one that manages our vendor! expertise as a reference to you. (This process took me 3 months – start early.) MACPA 2010 Technology Conference | 19
- 20. THE TECHNOLOGY STRATEGY 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) MACPA 2010 Technology Conference | 20
- 21. THE TECHNOLOGY STRATEGY 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) MACPA 2010 Technology Conference | 21
- 22. THE TECHNOLOGY STRATEGY 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 have a staff of Outsourced vendors they do. system engineers, database This can be done with dignity a few steps prior to this one, administrators, exchange experts. when the Scenario Their vendor are chosen. so they and core competency is IT, invested in the training of their staff. MACPA 2010 Technology Conference | 22
- 23. THE TECHNOLOGY STRATEGY 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 same with offsite assistance. Assistant’s time off balance. is a ticketing system for me There to monitor. Economics of outsourcing? Economical. Employees became more self Make sure there is a ticketing system, to keep your employees informed of their issues sufficient. MACPA 2010 Technology Conference | 23
- 24. THE TECHNOLOGY STRATEGY 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 MACPA 2010 Technology Conference | 24
- 25. THE TECHNOLOGY STRATEGY STEP 11: New Emerging Technology Depending on your available resources throughout this plan, once your architecture is set, CRM Integrate you can now start to implement Google CRM Search and these secondary IT needs Outlook Internal Smart- Wiki Phones Technology Social Blogging Media Share- Point SEO The backbone is finally set for growth. (These are things you should keep in mind in the early stages and design for.) MACPA 2010 Technology Conference | 25
- 26. AGENDA Set the Stage Immediate Actions Needed Develop and Execute The Technology Strategy Summary Questions MACPA 2010 Technology Conference | 26
- 27. 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. 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 MACPA 2010 Technology Conference | 27
- 28. 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? MACPA 2010 Technology Conference | 28
- 29. AGENDA Set the Stage Immediate Actions Needed Develop and Execute The Technology Strategy Summary Questions MACPA 2010 Technology Conference | 29