Is Your It Department Necessary? You May Be Surprised By The Answer

Is Your It Department Necessary? You May Be Surprised By The Answer Business owners and CFOs of mid-sized companies quite often don?t have a clear understanding of what their IT department is doing for their business. Indeed, most just treat IT as a necessary line item on the P&L statement simply because they believe they have no choice if they are to stay competitive. Critical questions such as “Are we spending enough on our IT infrastructure?”, “Are we spending too much on our IT infrastructure”, or “Are we getting the productivity gains that we anticipated when we purchased that new software?” often go unanswered. Questions such as these are at the heart of your business? efficiency – and can be the most baffling. Educating yourself is, as is often the case, the best weapon to tackle these seemingly innocuous questions.

The first thing to realize is that running an IT department is hard work. Your IT staff is spending more time (and money) supporting your employees than ever. Many of the technologies are complex and take a long time to learn and master. The IT staff is under increasingly tighter budget constraints and their capabilities are limited. Despite all these pressures, you would be surprised to learn how often owners decide to go it alone. They usually hire a single person to handle their IT needs or contract on a time and materials basis with one of hundreds of IT service companies available in the local yellow pages. Unfortunately, this line of thinking focuses on initial cost control, rather than on controlling the total cost of ownership (TCO). And , as you are probably aware, TCO has a nasty way of affecting your business? bottom line.

So why does the TCO balloon way beyond the initial cost projections you ask? Simply because a single resource or consultant is not adequately skilled to handle the myriad of day-to-day issues that typically arise in an average IT department supporting 50+ users. Help desk, procurement, software deployment/roll out, and budget management/planning are just a few areas that come to mind. Few individuals are equipped to handle them all with the rapid evolution of today?s technology environment. The response to this onslaught is usually two fold: 1) add new hardware/software with the hopes that it will solve the problem 2) hire consultants that will ultimately sell you more hardware/software. Since a holistically encompassing view of IT is non-existent, the business is basically at the mercy of this cycle of capricious infrastructure upgrades.

The good news, however, is that other people have already figured out the answer to most of these challenges. Business process outsourcing (BPO) is the recent trend more and more business owners are turning to and IT is no exception. This is not restricted to technology, as many other business functions such as accounting and legal are more than likely outsourced in a mid-sized organization. The next time you decide to go it alone and build or maintain your own IT infrastructure, ask yourself whether your business would be better served if you were to focus instead on running the business while allowing BPO to manage your TCO, providing you full knowledge of your IT infrastructure benefits and needs. The icing on the cake is that you will find a BPO company will almost always do the job cheaper and faster without compromising quality.

In summary, it should be clear that the day-to-day management of an IT department is not a trivial task. Furthermore, although the IT landscape is littered with tantalizing offers that seem like cheap alternatives, be aware of the big, bad TCO. Instead, take the time to do your homework. Do some research and find good, reputable BPO companies in your area. Be certain they can deliver what they promise. When you see quantifiable results, you can feel confident that in the long run, you have made the right decision.

1 I use the term “department” loosely, since for our purposes, department does not necessarily mean IT organizations with many employees. If you employ even a single resource part-time or on a contract basis, the functions that s/he must serve share commonality with the traditional concept of an IT department.