Winning the outsourcing argument

By Fred Aun, Smart Partner
27 April 2001 01:45 PM
Tags: msps, outsourcing, say

Pitch the benefits

So far, SiteRock has been able to avoid "the control battle," says Kane. Its trick is to clearly inform potential clients that an MSP will free IT staffers from mundane system-management tasks.

Just as ASPs assert that outsourcing applications alleviates an IT department from running the treadmill of continual product updates, bug fixes and crashes, MSPs must stress an IT staff's skills should not be wasted on rudimentary infrastructure monitoring.

In some regards, IT anxiety to outsourcing is nothing new. The data centre variety of outsourcing took off in the early 1990s on the heels of the leveraged buyout craze. Organisations loaded with debt were eager to get non-strategic assets off their books. But as the trend took hold, corporate and government IT managers began to resist the outsourcing movement as a threat to their livelihoods. In some cases, internal IT departments competed with outside contractors for outsourcing deals.

In addition, outsourcing's potential for employee dislocation put unions on alert in both the United States and Europe.

"This isn't really all that different from the outsourcing world," says Carrie Lewis, a Yankee Group analyst. "When it comes to selling outsourced solutions, the biggest dilemma is overcoming internal resistance."

She says MSPs must be creative about finding ways to get in the door. They can form partnerships with data and/or Web hosting companies, employ targeted marketing approaches or make arrangements with established systems integrators. "They also have to make sure what they're offering to the end user is something the end user is looking for," says Lewis, who asserts that sales strategies "are probably the weakest connection for MSPs."

Lewis says MSPs might consider the approach taken by Nuclio, an MSP that's working with GATX. She says Nuclio agreed to handle GATX's systems management only during off-hours of the the company's IT department. "That's kind of a halfway solution," says Lewis. "It's creative. Meeting a customer halfway like that is a strategy MSPs are going to have to employ."

Meanwhile,the MSP Association is sponsoring a study that its members can use to show potential clients the "business value" gained from using MSPs, says Philip Little, the association's spokesman.

Kane and Elliot contend an MSP is least likely to ruffle IT's feathers if it sticks to basic "level one" systems management and doesn't try to work its way up the ladder into problem resolution and system design areas.

"Then it moves from process-driven to skill-driven," observes Kane. "There are quite a few MSPs who say, 'We'll take all of the IT management headache off your plate, all the way up to level three.' That's what a lot of companies are concerned about."

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