Should you outsource network services? Five indicators can help decide whether network operations are a candidate for outsourcing

Communications News,  March, 2004  by Bill Bauer,  Bruce Cheng,  Timothy Strait

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Too often, attitudes toward network operations are similar to those about personal health. In both cases, the indicators that there is a need for outside help are ignored--until some catastrophic event motivates a change in attitude.

With network operations, unlike personal health care, there are usually several layers of approvals that managers must go through before they can get outside help. When is there real cause to outsource network operations and when should internal control be maintained? Here are five indicators that network operations are a good candidate for outsourcing:

Rising IT expenses. Networks tend to grow organically rather than methodically. That is, their growth is compelled by their environment, not by a carefully staged and managed strategic plan. While all support operations should be responsive to overall changes in an organization, if unchecked, that response can be dangerous.

Networks are reflections of activities already under way in the overall organization. Management's understanding of everything from partitioning to firewalls and security often leads to one-on-one thinking. If the finance and accounting departments are running independently, reasoning goes that they must need separate servers, storage and more.

Similar tunnel vision applies when new products and services are offered. A new product may need database services, but that does not necessarily imply that a new box is required to deliver those services. Sometimes, in response to this topsy-like growth, network operators will push for hardware consolidations driven by new technologies. While two racks might be eliminated with the newest multitasking server, doing so is an additional and unplanned cost, and may have implications that are overlooked in the rush to fix the immediate problem.

Increasing network instability. Many early signs of instability are often ignored because they deal with end-user complaints rather than true operations. Yet, rising numbers of calls about problems with file sharing, Internet access or e-mail corruption should not be taken lightly. Often, they are indicators of more troublesome underlying problems.

Security overwhelming operations. When local IT personnel's time and energies are increasingly devoted to security, normal operations will be short-changed. Within firewalls and other protections, growing numbers of employee probes drain operator, management and human resource cycles. Outside the security perimeter exists a constant demand to identify, obtain and install security patches to both operating systems and individual applications. When this evolves into a full-time job, other functions will necessarily be ignored.

New regulatory compliance requirements. If an industry comes under the purview of new, expansive regulatory compliance requirements, the demands of meeting new certifications can be overwhelming. Rather than maintaining a well-run network, operators will find themselves drawn into deciphering the implications of often vaguely worded regulations. For example, industries ranging from finance and credit to medical services are racing to catch up with the requirements of the Sarbanes-Oxley Act or the Health Insurance Portability and Accountability Act.

Reorganizations. Intra-organizational changes--like re-engineering efforts or whole-scale reorganizations--can have profound effects on network operations even though these may not be immediately apparent. Introducing call-management systems that digitally record and store online every incoming and outgoing call to the customer-support department, or driving customer calls to Web-based help or ordering systems, can change the entire mix of network support activities. Extra-organizational changes like acquiring and integrating new firms into a single coherent and efficient organization also can put enormous demands on network operations.

Companies pursuing "roll-up" strategies to rapidly combine a number of related firms into an integrated whole are particularly vulnerable to network complexities. In these situations, the drive to eliminate duplicative capabilities and bring all support activities back to the parent organization means that network services are in continual flux.

Here are some reasons to justify the switch to outsourced services:

Reduce and control operating costs. Outsourcing results in predictable monthly costs, usually on a per-device basis, rather than month-to-month fluctuations driven by demand. Eliminating a network operations center (NOC) or avoiding the cost of building an internal NOC capability can provide immediate and substantial cost savings.

Redistribute resources. Once the day-to-day network services are outsourced, internal MIS staff are free to concentrate on strategic company IT projects, rather than reactive infrastructure-management activities. Rather than having to "pipeline" expertise (e.g., one person knows Cisco, one knows Bay) with no backup or redundancy, outsourced providers can offer consistent technical depth and breadth.