It’s Not Me, It’s You…Breaking Up with your Managed Services Relationship

One of my first charges upon joining my current employer involved in-sourcing a fairly significant faction of the technology department away from a 20+ year managed services engagement. This department-part needed to be hired, trained, and integrated into an existing department. Over the course of the 20+ years there may or may not have been finger-pointing outsourced v. internal staff -style, a perception of not high levels of service, a general confusion around who to contact for specific issues and project management that aligned perfectly with the timeline of the provider but not-so-much the university. Hiring technology staff for a specialized administrative system including systems and administration expertise…in the northeast…on a budget…in less than six months?

Allow me to eliminate any dramatic tension by saying right up front, it proved to be a seamless transition. Seamless and somehow refreshing. And not only was the transition seamless, service has improved exponentially and cost decreased even more over the course of the ensuing year.

Remember when to the untrained eye it made sense to outsource quite a bit of IT? “Well if we eliminate that payroll, we’ll save the company/college a million dollars!” Have you ever heard anyone give an update a few years later on savings? Most likely, unless it was a very small, duplicative, tier-1-support-level area, you have not been wowed by followup reports on cost savings and service improvements. Why is that? Here are a few of my ‘takes’:

  • Third-parties do have a direct interest in budgets – their own. 
  • Technology sales teams tend to be the best I’ve experienced. They can absolutely show you a savings on salary. It’s when you match up those savings with the variety of other line items that the savings disappear rapidly.
  • Sales teams get you ‘in the outsourcing’ door with a hook: I can save you 50% of what you’re spending now. What they mean is, what you’re spending now on what you’re spending now. There will be other fees and charges, expenses and investments. It’s all about business. Theirs. And trust you will likely pay more.
  • If a company can convince a leader – let’s say a finance leader – to pursue savings by eliminating an entire high-level branch of technology, suddenly there are no pros in-house on that area, for example, networking. You are now chained to a company and trusting them to monitor systems for a fee – that you might already be monitoring in-house for free. (Trust me, this happens, I’ve seen it.) You already have that service. Now you’re paying for it again.

In-sourcing in 2014 is similar to the year when everyone finally succumbed to doing away with their landline at home for good. We all got cell phones and dropped our landlines, then panicked (what about 9-1-1???) and reinstated our landlines until, finally, we realized we could save money and survive without the safety net of that landline. YES. You can absolutely save money and get better service by investing in qualified IT staff dedicated to one budget (yours) and one business (yours). It takes time, patience and energy, but in the long run, it’s often (not always) the smartest choice.

What keeps you from ripping off the managed services bandage and investing – possibly re-investing – in your IT team? The fear of transition? The fear of failure? The fear of downtime? The fear of backlash? In most cases it’s the fear of losing the convenience of just paying someone to do something you’re not at all familiar with – and never plan to be. If that’s the case – hire someone you trust with the promise that you will support them, listen to them and allow them to be integrated into your long-term financial plan/strategy. They need to be someone that speaks your language, that you are comfortable with and that you look forward to sitting around many-a table with, on the regular.

Come on – rip it off. You’ll feel better once you do.

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