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F E A T U R E

The Handoff

July 24, 2003
By Bruce Boardman

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The Real Cost

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	In this article
	Introduction
	The Real Cost
	Executive Summary \| By the Numbers

As word leaks out about your network-management outsourcing plans, expect your employees to think worst-case scenario. Even if you are not cutting staff but instead repurposing some or all to new projects, morale will suffer. Change is traumatic. Be straight with your people, or key employees will seek other work. Make no mistake, your IT staff's knowledge is a tangible organizational asset; losing it would negatively affect pre- and post-conversion operations and hinder a smooth knowledge transfer. And if the outsourcing effort fails, converting to a new MSP or bringing operations back in house will require staff and knowledge acquisition.

In the past, outsourcers could bolster knowledge transfer by absorbing some of their clients' existing staff. Now, though, MSPs are under more economic pressure, and given the limited number of dollars involved in an SMB contract, staff redeployment is less likely. None of the management outsourcers responding to our RFI even hinted at this option.

Of course, monetary incentives can slow turnover. In addition, some knowledge will transfer to the outsourcer naturally during the conversion process, and some will exist in the reporting that the MSP provides.

But some of your employees--and their knowledge--will walk into the parking lot, turn the key and drive away. Count on it.

Working on Your Relationship

One of the precepts of outsourcing is leveraging a concentration of talent without having to pay for its development, care and feeding. Sweet-spot details, like reports on router availability or server uptime, are going to be delivered by all network-management outsourcers.

But what happens when you need more than these core deliverables? When special applications require support or when not-so-clear-cut problems crop up, you'll find cracks in the relationship with your outsourcer. The remedy is clear delineation of duties through a definition of relationship roles.

This delineation will be easier for large companies with bigger IT staffs. They are more likely to have in-place personnel and best-practice processes, which will translate to the outsourcing roles that are needed. In smaller companies' org charts, these roles are rolled up into fewer people, who may be too busy fighting fires to do strategic planning.

So how can a small company cover all the bases when negotiating a NSM contract? For help with best practices, check out the IT Infrastructure Library at www.ogc.gov.uk/index.asp?id=2261. For a cautionary tale, see "Outsourcing Contracts Fail To Satisfy Many Customers, Study Says".

Know your comfort level when it comes to putting trust in the outsourcer and be sure to ask lots of questions. Responses to our RFI varied from a few pages to more than 100 pages, and each response required one or more follow-ups. Longer isn't always better; we found detailed, specific information in some of the shorter responses and cut-and-paste general overviews in some of the longer ones.

Take the time to clearly understand the boundaries of responsibility so you can judge what functions and costs remain on your shoulders. Only when you get this big picture can you judge whether outsourcing makes sense financially and operationally for your organization.

Bruce Boardman is executive editor of Network Computing, testing and writing about network management and systems. He has 12 years' IT experience managing networks and distributed computing for a financial service provider. Write to him at boardman@nwc.com.

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