It takes courage to come out and say your company would be better off outsourcing to someone else the business process you’re responsible for. Nonetheless, outsourcing has become well established in the IT marketplace as a whole, and network outsourcing — either WAN or integrated WAN and LAN outsourcing — is becoming increasingly common for both large and medium-sized enterprises.
Estimates of the size of the global outsourcing market are hard to come by, but it is certainly worth tens of billions of dollars annually. Anecdotal evidence suggests it is growing at between 13 and 15 percent per year.
What’s the attraction of outsourcing your network? There are five key ways it can improve the efficiency of an organization, according to research house Frost & Sullivan:
- Better use of capital: Without network infrastructure investments to be made, enterprises have more capital to invest in strategic areas such as customer acquisition and retention. Additionally, debt may be reduced, and the effective overall cost of ownership of network assets may be reduced.
- Reduced costs and greater operational efficiency: Outsourcers can, in theory, benefit from large economies of scale, especially when operating large international networks. Taking advantage of an outsourcer's greater expertise and specialism may also lead to improved efficiency, productivity, and quality of service (QoS) for the organization.
- Simplified, more flexible network operation: By outsourcing the network, companies face more predictable costs. When more capacity is required, costs increase smoothly when a usage-based cost structure is in place. Service quality can be specified by an SLA (Service Level Agreement).
- Revenue enhancement: By using faster moving outsourcers, especially internationally, required changes and upgrades can be completed faster, so profit generating activities that rely on the network have less time to market, resulting in revenue streams starting sooner.
- Staff shortage problems can be eliminated: Many enterprises have difficulty providing sufficient human resources to maintain their networks. Outsourcers often provide environments with greater job progression possibilities than enterprises, so they are often better at attracting skilled networking professionals. Plus, outsourcer staff numbers can easily be increased temporarily when individual project requirements dictate.
Page 2: Outsourcing: Reducing or Increasing Risk?