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Outsourcing IT during peak times keeps the pizza from burning

DALLAS, TX – Feb 15, 2002 The numbers are starting to climb slowly. The television news anchors say so. Every half-hour there it is, the picture over their shoulder is a big arrow pointing upward. The government’s leading economic indicators, they report, are stabilizing.

The follow-up story never reported is that it takes much longer for those arrows to point north for small and mid-sized companies.

Managers know the bottom line is the bottom line. Budgets are still tight, and most businesses don’t have money to waste, particularly on expensive information-technology operations.

Highly trained IT professionals who keep everything from crashing can devastate a budget. They are the most important team members when nothing is working, but often are viewed as dead weight when there is no crisis or urgent development project.

So how are successful companies staying successful in the delicate staffing balancing act? They’re focusing on what they best know how to do and ordering out the rest.

It’s a fundamental business model. If you make pizzas, make pizzas. If you need someone to develop software to determine how much pizza sauce to use or an IT expert to maintain your network, bring in the experts when you need them.

IT is one of the vital functions many companies outsource. In fact, in the last five years the market has tripled, according to a report by The Conference Board. Outsourcing was a $100 billion industry in 1996 and a $345 billion industry in 2000.

Outsourcing was once viewed as a Band-Aid to fix a bleeding budget. But now, managers think it a miracle cure.

New computer technology is introduced almost everyday. Some of the programs are simple, but others require in-depth, expensive training. There are just a handful of companies that can afford large enough IT staffs to maintain their systems while also training on new technology. The rest of the business world has a handful of IT people, if they’re lucky.

Staffing issues have become an extremely important, and sometimes costly, balancing act. How do companies react when there are surges in IT needs?

Say this Saturday is the big finale of the Salt Lake City 2002 Olympic Winter Games, and you own a chain of pizza stores throughout Dallas. You realize you don’t have enough workers to crank-out all those meat-lovers’ pizzas you expect to be ordered that night. You could run around to all the area high schools, hiring every pimply-faced teen-ager in sight. They’d be happy to work because they need the money for spring break. Then the problem hits you, what do you do with the staff after the Olympic flame goes out? Fire them? Cut back on scheduling?

While it may seem like an over-simplified example of an IT problem, it has the same premise of the staffing balancing act. A surge in business is good during the surge. Afterward, the fallout hits hard.

The faster a product gets created and shipped to the marketplace, the faster a company can capture business. The faster a company runs out of work for its big staff, the faster money is drained out of its account.

This is where small specialized IT outsourcing companies are making a huge impact for all sizes of business. Their business model is providing fast turn-around on high-quality IT and software services. They deploy personnel to design new software, maintain systems or develop programs that weigh pizza sauce. The specialists do their jobs, help the company meets its goals and move on to the next assignment.

Outsourcing can save money on expensive training and staffing overhead. But, it also brings outside experts in-house, improves customer service and lets you focus on pizzas.

According to a survey by The Conference Board, 97 percent of companies that have outsourced IT projects would do it again.

A new trend in IT and software development, offshore outsourcing, is reducing software development costs for many enterprises. There is an increasing interest in offshore outsourcing as major software developers have started moving development projects offshore and, in some cases, establishing their own development centers offshore.

There are some things to keep in mind before signing an outsourcing contract. Make sure the small outsourcing supplier provides quality service levels. Ask for references and call around. Ensure the contract is flexible enough to meet deadlines and IT requirements. It doesn’t help to have an IT outsourcer who works only Monday through Friday from noon to 2 p.m. Shop around � outsourcing companies are not all the same.

Small outsourcing companies have problems too. A good one has the best-trained people in the area. It won’t do much good to bring in someone who knows less than your staff or burns the pizzas.

The outsourcing companies live and die by product quality. If it’s not top rate, send it back.

Sean Yalamanchi is president of InfoVision Consultants Inc. in Richardson. His e-mail address is sean@infovision.net.