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Making the case AGAINST outsourcing

Discussion in 'Employment & Jobs' started by Josiahb, Jun 30, 2010.

  1. Josiahb

    Josiahb Gigabyte Poster

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    I recently had a conversation with another techie who was of the opinion that its practically impossible for smaller companies to gain full value from outsourcing their IT, he got me thinking in regards to my current job and I reckon its possible to save the company somewhere in the region of £10,000 overall per year by bringing our IT and telecoms support in house. This also has a high potential to provide us with a better level of support overall, clearer future plans, easier budgetting etc.

    The problem is going to be making the case to my boss and not having it sound like I've found a damn fine excuse to get my hands on some new toys (and a bit of extra cash...).

    Am I deluding myself? Has anyone else ever successfully made the case for ditching the outsource?

    If it makes any difference the company currently has around 50 employees, 3 of whom make up the in house IT team. The other 2 are both part time and I'm the only one with any 'real' support training.
     
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  2. LukeP

    LukeP Gigabyte Poster

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    I've done it twice.

    In both cases this was the right thing to do but mainly because IT Support companies used weren't that great and were charging a lot for poor service.

    I definately think that small businesses, if they can afford full-time staff (ie. costs less, same or only a little bit more than having it outsourced) will be better off having someone in-house, as long as the employee isn't waste of time.

    This way you have someone there 8 hours a day thinking how to improve things and make them better and not only company that will fix things when they go down, and once a year (or 2 years) comes round with a proposal costing a fortune to implement to roll out new infrastructure without any clear benefits (or clear understanding how company will benefit from it)

    Hope this makes sense.

    EDIT: The only downside is that after you leave the company has no outsourced support and have to rely on new employee who might not be as good as you were
     
    Last edited: Jun 30, 2010
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  3. BosonMichael
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    BosonMichael Yottabyte Poster

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    Depends on the size of the company, how much the outsourced techs cost, and whether the current techs on staff (or someone they can readily hire) can handle what the outsourced techs are doing. Most small companies can't afford to hire a tech full time who can do everything that multiple outsource companies can do on an hourly basis. Most large companies can, and they typically need someone full time for those duties that would just take a couple hours in a small company... so unless the outsourcing is dirt cheap, large companies can often ditch outsourcing - they just have to WANT to do it.

    When I was one of those "outsourced techs", I'd routinely provide hourly support for companies with 10-70 employees who didn't have a full-time IT staff, so it wouldn't be out of the ordinary for a company the size of your employer to go with a completely outsourced solution. A company of 50 people should barely need one tech, and often, not even that. Back in the "old days" (about 12 years ago), we had 2 techs for about 200 people. In my last job, we had 3 techs for 500 people.
     
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  4. Josiahb

    Josiahb Gigabyte Poster

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    Thanks Luke, glad to know someones managed it. Out of interest what sort of employee numbers were you dealing with?

    Hadn't really thought about this, actually a lot of my thinking was related to me getting to do the things I want without having to move!
     
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  5. LukeP

    LukeP Gigabyte Poster

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    First one was about 50 client machines and 7 servers in 5 branches.
    Second is my current job and we've ditched the support as there's 2 of us here now and we like to think we're better than them. We have around 70 clients and after we finish our infrastructure upgrade we're looking at about 10 servers (most of them virtualized)

    Mind you though, the second support company has about 5 staff and we've kind of outgrown them infrastructure wise.
     
    Last edited: Jun 30, 2010
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  6. Boycie
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    Boycie Senior Beer Tester

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    cost is a big part of the outsourcing decision for the majority of most sme's - rightly or wrongly.

    for example, a fully outsourced contract for a small company may cost in the region of £1K per month. You can't employ someone for that.
     
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  7. craigie

    craigie Terabyte Poster

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    I work for an outsourced managed service company.

    All of the clients we have taken on board who have there own IT personnel have had terrible networks.

    The reason for this is the IT department become complacent, they don't learn any new skills and haven't got the experience of installing/upgrading servers on a weekly basis.

    A lot of companies with there own IT staff use us for the complicated jobs.

    I know a few people who are in an IT department of less than four individuals. Most with MCSE, and I already have more server knowledge as they only perform an upgrade every 5 years or so.
     
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  8. Josiahb

    Josiahb Gigabyte Poster

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    Got any jobs going? :p

    Ahh... we have outsourced support and our networks terrible (at least I think it is) so slightly different situation!

    I'm all about new skills so I'm not too worried on that front, although as time goes on that has to become a concern.

    Thats kind of what we seem to be moving towards here, day to day in house and the projects go outside, the problem is I don't think our outsourcing company are providing best value in that respect because everything seems to take forever....

    This is the thing, we don't even upgrade every 5 years at the moment, our main file server is still running Windows 2000, we'll be clinging on to Exchange '03 till the server explodes. The only reason we have any '08 servers on the system is because we wanted the Terminal Server to be 64bit.

    It really feels like we're crippling our IT systems by continuing to work with outsourced IT at the moment, now it may just be that we need to investigate an alternative outsourcing company but making that even a vague possibility is challenging enough.
     
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  9. BosonMichael
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    BosonMichael Yottabyte Poster

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    But... do they work? If so, why would you change them? Is there some feature in Server 2008 that you GOTTA have just for a file server? Is there some must-have feature in Exchange 2010 that justifies the software, hardware, and manpower expense to migrate from Exchange 2003?

    "If it ain't broke, don't 'fix' it." That little saying has served me well over the years... and I've seen what happens to those who don't follow it.

    As far as your outsourcing company not doing a good job... find out what they're not doing right and bring these concerns to your manager. Perhaps your knowledge will give him confidence that you can handle the stuff that the outsourcing company is handling (or, not handling correctly, as the case may be).

    You say that you believe that your network is "terrible". What do you see that is wrong with it?
     
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  10. Josiahb

    Josiahb Gigabyte Poster

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    Alrighty, when I describe our 2000 server as a file server I'm not really giving it full credit, its our file server, print server, AD, DNS, DHCP, remote access, its got the Sophos enterprise console on there and both our old and new intranet sites. At one point it was the only server the company owned so it's also still hosting a MySQL DB for the old intranet and an SQL DB for our accounts package.

    Moving from Exchange '03 is more on the nice to have list, so I'll admit thats harder to make any kind of business case for (it'll be easier if people keep avoiding the subject every time I mention archiving, that 75GB mail store limit is creeping up fast). The Exchange server is actually the area where we've had most disagreement with our outsource outfit, we were previously running a Linux mail server which suffered from a whole wealth of problems including a complete inability to interface properly with any decent mail client, after a whole gob load of fairly uncomfortable meetings they finally caved and we made the leap to exchange.

    The truth is, I'm currently left feeling like we're missing out on a lot of useful tools for the business because our outsourcing company don't have the time to help us develop beyond our current point. Because the outsourcing company are there I'm never given the time to really take a look at things and put the ship in order (I've been trying to actually document our network for about a year for instance, but everytime I make a serious attempt some other project is shoved in higher up the priority list), the general opinion appears to be that everything will be fine because the outsource know it all therefore knowing what we're running, why we're running it and what we can do if it all catches fire isn't as important as finding some colourful new icons for everyones quick launch toolbar. Everything takes forever and its driving me round the bend!
     
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  11. BosonMichael
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    BosonMichael Yottabyte Poster

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    Okay, fine. But... does it work? Does it provide those functions at an acceptable level? If so, does it need to be upgraded for the sake of upgrading? If not, then make the case to your manager for upgrading it based on those conclusions.

    Sure, it's a good idea to have redundancy. But you're in a company with 50 employees. Depending on how badly business would be affected with a server failure for the length of time it would take to get a replacement, it may not be cost effective to do so.

    Just so you know, I'm not disagreeing with you... I'm simply pointing out how business views these things. If it can be proven to be a *necessary* cost (because you can't do X with the current hardware/software), or if you can prove that money will be saved by upgrading (don't just BS it... you need hard numbers), then you have ammunition to move forward. If you can't prove either of those things, then you might want to consider whether you want the upgrade because you want it or the company needs it. :)

    With only 50 users, you have a user behavior problem, not a storage problem. That would mean you've got every one of your users with a gig-and-a-half box. I ran Exchange 2003 with an extremely lenient 2GB limit (which causes problems when a box gets anywhere CLOSE to that big) for 500 users and never came close to hitting 75 GB.

    They probably DO have the time... but only if your company wants to spend the money. I think that's probably the case.

    Again, I'll be the devil's (company's) advocate: what needs developing? Having "useful tools" isn't free. You have to make a business case for it. They're going to look primarily at cost - as well they should. Something you might find useful or helpful might not be possible under the company's budget. But if you can convince them that the benefits are worth the cost, OR if you can convince them that they will save money (whether immediate, short-term, or long-term), THEN you're much more likely to get what you ask for. And this is true for ANY company you work for from here on out.

    Are you tasked routinely with finding some colourful new icons for everyone's quick launch toolbar? If so, they're probably finding busy work for you to do because there isn't enough REAL work for three techs, let alone just one tech.

    From the sound of things, if your employer is having you mess with toolbar icons instead of help out the consultants, it doesn't sound like they have enough confidence that you can administer the servers and network on your own without the consulting company. If you don't have any server admin experience (I don't know if you do or not), I can understand the logic behind that decision. You will have to gain their confidence before they'll consider eliminating the outsourcing.

    Welcome to IT. :) That's actually quite common. But perhaps you need to try another employer to see for yourself... perhaps it's time for you to make a change if you're unhappy with how things are going.
     
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  12. LukeP

    LukeP Gigabyte Poster

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    Mate, I think you should start looking for another job. Working in a company that doesn't want to spend on IT is a pain. Been there, done that. In my last job there was no money for my ideas but there was enough to pay external company a fortune for fixing something they did wrong in the first place.

    There were invoices for software but no sign of licenses or keys. Everything was wrong. 2 servers in one branch so 4 people could remote to TS without paying for licenses. NetGear Firewalls in all the branches still in boxes with no VPNs setup and BT routers' firewalls used. All branches had the same IP ranges. Absolute mess.

    At first I wasn't given the chance to even look at it. I was developing in PHP, changing toners, helping with Office and even doing admin staff (taking orders, answering calls). I kept asking but nothing was happening. So finally I stopped talking and started working late, from home and during the weekends. Tight company will always let you work for free :D. I documented the network, sorted out licenses, office, printers. As it started to look better and I showed up everything documented I earned some trust.

    Went easy from there. Sorted out the servers, backup, VPNs, mySQL server, web hosting and it was great. We ditched external company as everything was working fine. Then, I wanted to carry on and rollout Exchange and there was where I stopped. When I asked for money on Exchange rollout (plus few Office licenses) I was laughed at. There was no chance of them spending any money on IT. All the stuff I did before was great because they didn't have to spend a penny. So what they tried to do. Make me do admin staff as there was nothing to do in IT. I left.

    It was definately worth doing as it gave me a lot of experience, confidence and boosted my CV. But if employer is like that. Do what will benefit you, learn what you want. Get that on your CV and move on.

    Sorry for the long post and good luck!
     
    Last edited: Jul 1, 2010
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  13. Josiahb

    Josiahb Gigabyte Poster

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    Thanks for the advice guys, and don't worry BM I took yours in the spirit it was meant! (I've been round here a while now remember :p)

    Chances are my final decision is going to be to move on, theres a certain immovability in the management here that makes even FREE stuff challenging to make happen. BM's right in describing a user behaviour problem, policies are drawn up in many cases so that we can say we have a policy, no enforcement or management is undertaken (despite pointing out we already have the tools available so there is zero cost to the company), no one can manage to agree on archiving and data retention procedures, disaster recovery is a vague guess work plan (still better than when I started and the disaster recovery plan consisted of PANIC!!).

    Polite reminders appear to have reached a point where they no longer have an effect as IT's concerns are seen as secondary to everything else even when its pointed out that should anything go wrong the downtime could be extensive. Largely because the risks are not fully understood (by my manager).

    I've been trying recently to increase user knowledge in an effort to convince management that we didn't just write these policies for our own amusement and if we're not going to enforce them as is then we need to look at rewriting them and ensuring the technology fits the policy. It's not working that well so far....

    EDIT: If this thread has done nothing else its given me a chance to let it all out! Didn't realise quite how much things were getting to me!
     
    Last edited: Jul 2, 2010
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  14. westernkings

    westernkings Gigabyte Poster

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    Just to be really blunt for a second, am I right in thinking the only real issue is that the management are not forthcoming with the funds to pump into IT? If the networks work mate and it all ticks over, then sit back and enjoy the wage until something else comes around. I learned in the public sector that frankly, you can try and change the system all you like, but it's the system that eventually changes you, which translates to "if you can't beat them, join them" and wait for a better deal somewhere else mate.

    Sit back and enjoy the wage, as long as no one is pecking at your head, complaining about things they have refused to do, then it's not THAT bad.

    One thing I did notice is that, for a 50 user network, you seem to want to do a lot of big things that are not really needed, small companies really do not need or want big ideas, they want a functioning network, which is what you have :) Get looking for a move up the ladder my man. -:D
     
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  15. Josiahb

    Josiahb Gigabyte Poster

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    Meh, your probably right, we don't seem to be using a lot of the tools we have available to us now so the chances of moving things on are fairly non-existent.

    I might (just so I can say I tried) see if I can set up some third party review of our systems just to see what they come up with, at least then I'll know if its all in my head or not!

    The CV is going out to people as we speak so either I'll manage to change things or I'll move on, sitting back and enjoying the wage isn't something that really comes naturally to me unfortunately (family trait I'm afraid, genetics is a bitch).

    Right, I'm off to find out how many viruses my bosses machine has picked up recently (13 infections detected so far this year, only one was a false positive).
     
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  16. BosonMichael
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    BosonMichael Yottabyte Poster

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    Glad to hear it - some people completely misinterpret my advice! :)

    That happens many places, bro... just about everywhere I've worked. For example, it certainly wasn't *my* decision to keep our mailbox limit at 2 gig. I coulda changed it at any time. And almost immediately, I'd hear moans and complaints from managers who can't receive e-mail because their box is full. The IT Manager himself had a 1.7G box, and he himself already knew that was a bad thing! So... although it was something that was often discussed in the 20 months I was there, it was something that never got "fixed" like it should have. And it still seemed to work, with a few one-off corrupted e-mails in those large boxes... and a looooong backup time every night, since we performed individual mailbox backups.

    Just approach it as business-sensical, as logical, and as calmly as you can. Sway them over with statistics and numbers and pound signs, if you can. The surefire way to lose them is by being confrontational or overly fatalistic without having the data (and externally sourced opinions that agree with you) to back up what you say.

    It's good for you to vent from time to time. :)
     
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  17. BosonMichael
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    BosonMichael Yottabyte Poster

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    I agree with this. Most 50-user companies don't need a whole heck of a lot... certainly not SANs and server farms and a whole lot of "cool tools" and technologies... I wouldn't be surprised to see just a single SBS box (cringe!) at a place that size.
     
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  18. Josiahb

    Josiahb Gigabyte Poster

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    lol we'd need a fair bit of consolidation to get down to that level, we've currently got 9 physical servers running (will shortly drop to 8) 2 of those are virtualisation hosts with 6 virtual machines between them.
     
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  19. Sparky
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    Sparky Zettabyte Poster Moderator

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    Err no, you need to find the right company.

    3 people in-house for 50 users? Could be possible to outsource everything tbh.
     
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  20. BosonMichael
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    Wow... that's a server for every 5.5 users (not counting the virtual ones)! :blink What do you need that many servers for, if you're allowed to reveal that information?

    If the consulting company set you guys up that way... they've probably not got you set up the way you *could* be set up, virtualization or no virtualization. Unless you're working for a technology company, that's far too many servers for 50 users.
     
    Last edited: Jul 2, 2010
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