In fact, a rising number of CIOs have already pushed their tech departments to the limits, only to be met with even more IT demands. For this reason, IT professionals may stop scrambling to come up with a sufficient supply of funds and labor to support further tech expansion. Instead, various businesses may now be looking to develop their IT solutions elsewhere, outsourcing their services to external providers.
One such instance can be seen with the German airline Lufthansa. Bloomberg recently reported that the company has chosen to move its technological functions to outside service providers.
Lufthansa plans to partner with outside IT companies across the globe, which will help the German enterprise expand its data storage and analytics infrastructure. Without relying on these separate parties, the airline would not be able to develop its IT department to the extent to which they wish, seemingly held back by financial constraints.
With this decision, the corporation will be outsourcing 1,800 of its 2,800 IT professional positions, in addition to a significant proportion of its onsite technological functions. Reuters explained that with third-party service providers, the enterprise will be able to eliminate the need for these tech jobs, reducing the amount of money it has to pay in employee salaries.
Additionally, it will no longer have to continue supporting its current data centers and associated infrastructure, reducing IT maintenance and management costs. Ultimately, Lufthansa expects to save tens of millions of dollars in technological expenses by opting to outsource.
Other CIOs ready to follow suit?
In light of this major airline’s decision, other companies may be planning to follow its example. While certain businesses can surely benefit from outsourcing their IT services, it is important that CIOs considering this option take several factors into consideration. Only by thoroughly thinking through their corporations’ needs and own resources can an IT department determine whether an outsourcing endeavor is worth the effort.
According to ComputerWeekly, the first thing that CIOs have to ask themselves is if their potential service providers can really offer them the space they need. The main purpose of outsourcing information storage and analytical infrastructure is to give companies’ data room to grow and at a more affordable price.
Because of this, IT departments need to complete extensive research about the external parties with which they may be entrusting their technological services. Before signing any contracts, CIOs should look into possible service providers’ promises. Just because these companies may state that they will give corporate clients a certain amount of room to expand does not mean that they actually have it.
“A lot of the time, datacenters with multiple customers, have already promised or over-promised space to other customers,” stated Anthony Day, associate at global law firm DLA Piper, according to ComputerWeekly.
After verifying that service providers really have the storage capacity that they have guaranteed to enterprises, CIOs are still not done with their preliminary investigation. It is key that professionals scrutinize the features and operations of third parties with whom they plan to partner. By doing so, they can ensure that these services will satisfy their companies’ IT needs.
The news source pointed out that there are a number of different components that IT executives should evaluate before signing on the dotted line with any one provider. For example, CIOs may not have even thought about it, but they have to be certain that these parties’ maintenance tasks work well with their corporations’ operations.
By ensuring that their companies’ operations would mesh well with those of prospective service providers, IT professionals could prevent glitches from occurring. Things to look out for include anything from inconvenient system updates during peak working hours to sluggish maintenance response times.
In the event that problems do occur with service providers that are already contracted, CIOs need to be ready to hold these external parties accountable for any snags.
“If they don’t hit the fixed times, you should be able to recoup some service credits or get money back, because you are not getting the service you expect,” Day told ComputerWeekly.
Making these investments makes little sense for IT executives, unless these external companies hold up their end of the bargain. If CIOs decide to outsource their technological functions, then they must also be certain that these outside services will be reliable and not cause them to incur excess expenses.