IT-the Outsource vs. In House Debate Part 211 Aug, 2010 By: Eric Stavola, Witt Company imageSource
IT-the Outsource vs. In House Debate Part 2
As I talk to more and more dealers / owners about the In-house vs. Outsource debate on IT, I’m realizing some key issues that really drive their decision to either “keep IT or outsource IT.” This decision can have a major impact on your company overall. In part two of our discussion on this topic, I want to ask some key questions on strategy, personnel, and revenue regarding your dealership to hopefully aid in the decision of what is best for your company’s bottom line.
Question #1: Do you want to own your customers’ network (strategy)?
I am not simply talking about being a managed print service provider for your client, I am talking about securing an ongoing partnership of software, hardware, storage, archival, retrieval, and of course, digital output needs. If you consider your dealership a "Total Solutions Provider" you should be setting your sights on attracting your smallest and largest customers at enterprise levels of value-added services to take your dealership to another echelon. Simply put, you should want to convince them to outsource their IT needs to your company in the hope of bringing more value to your dealership.
I am amazed that our industry seems to limit its self to just managed print services; instead, why not provide more value through “managed services.” First lets define clearly what managed services is:
Managed Services (MS) - Technical Support delivered under a service agreement that provides specified rates and guarantees the company a specific monthly minimum income. Managed IT services have and will see a tremendous boom over the next couple of years. Recent studies show that in 2008 it was a $42 billion dollar industry, and by 2012, that mark will sky rocket to $57.4 billion.
In- house Considerations:
Staff will be able to mine your current base of customers and find new revenue streams.
By having ownership of the network you get added protection from your competition trying to back door you with equipment or other services.
Easy transition to go after current customers and provide more services.
Could be able to provide many additional services.
Will have to expose your base to your outsource partner.
Additional revenue streams will be minimized.
Question #2: Do you have the right IT personnel?
Being in IT more than 18 years, I have realized that some of my fellow IT geeks can be, well, high maintenance at times.
We geeks typically fall under two categories: 1) the laid back personality or, 2) having a god-like complex. Both crave knowledge and are supportive, however, one is much easier to work with!
The bottom line here is, IT people usually want to talk to someone on his or her level of expertise, and assumes that if anything goes wrong (with product) your company has the personnel to fix it.
I see too many dealerships today without the proper personnel to handle large takedowns, let alone a network.
In- house Considerations:
If you do have in-house IT make sure they are easy to work with and are part of the solution and not the problem.
Have the confidence & trust to handle a variety of IT issues.
That one-stop shopping provides a level of consistency to your customers.
If you decide to outsource make sure the provider is easy to work with and not problematic.
Can deliver added support with less upfront expense.
More personnel to deal with the complexity of a variety of IT concerns.
Question #3: Are you getting the most out of IT (revenue)?
The ability for a dealership to tie IT services to revenue could be the key to ending this debate. Many dealerships have IT support engineers on staff that sit behind their desks and wait for service calls. This type of model allows for the In-house vs. Outsource debate to continue on. Some successful dealerships have uncovered the key to maintaining in-house support by tying IT services into the revenue stream as much as possible. To help tie things together consider:
Getting IT involved in the…
Any sales engineer on-staff needs to be able to help aid in the sales process. I learned long ago that we all “sell” in our industry, just some more directly than others. Pre-sales support is crucial in any business. Some IT personnel are more of a part of the “sales prevention” department than the sales support team. Geeks need to understand that they/we have positions at companies because sales people sell. We need to help aid the process along. Hoarding knowledge does not make IT more valuable; as a matter of fact it’s the opposite, the more information IT can disperse in an understandable and usable way, the better, making IT departments relatively priceless.
Have your CTO/CIT hold weekly meetings with your sales staff. He or she could participate in the creation of presentation tools, marketing and product information, software and solution strategies that are designed to improve the products the company sells. These meetings will prove to be invaluable in furthering better relations between your IT department and sales staff.
Tie MPS with IT:
Have your sales manager split his/her role between IT and MPS sales. Many dealerships are beginning to hire dedicated “MPS Champions” – why not make this specialized individual even more credible with usable IT information besides possessing actionable strategies for the sales process? The more you can tie IT personnel to the overall revenue of your dealership and/or organization, the better for all involved.
Eric Stavola is IT Director, Professional Services for a California-based dealership. He is a former network solutions manager for Kyocera Mita, and consults nationwide. Eric holds a Masters Degree in Information Systems & holds the following certifications: MCSE,MCSA, N+,CDIA+. At 619.379-3009.