Outsourcing IT functions is a tactical win in the wake of an unsustainable skills gap and tough economic conditions
South Africa has weathered many storms over the past few years, exacerbated by the pandemic and persistent load shedding. Interest rates are high, inflation is continuing to surprise on the upside, fuel prices offer little respite and, of course, the news that the country’s economy contracted in the last quarter of last year indicates that there is a realistic chance we’ll enter a technical recession sooner than later.
This is not a story about bad news. This is the reality that South African businesses are operating in, and it is one that reaffirms the general belief that we are a resilient country. Just like the rest of the world, businesses in this country have had to accelerate their digital transformation journeys. This is not the same world that it was a decade or even five years ago – technology broadly and IT specifically are vital cogs in any business machine.
Cloud computing, collecting large amounts of data, cybersecurity, data compliance – all these require specialised skills. Think about this, in order to build a decent IT department, a business needs to invest in skills at desktop and remote support level, skills for the access layer, firewall technicians, cloud experts and more. In other words, to have a decent IT department to manage a modern business requires at least seven or so highly skilled staff resources. The reason is because these array of skills are almost never present in the same person – rarely do you find a desktop technician who is an expert in firewall management or AWS.
This is the reality of businesses who – as we have already covered – are operating in a difficult economic climate. As if that were not enough, consider that the skills gap or skills shortage is becoming worse than ever. In our experience, if a company loses a skilled IT resource, they’d be lucky to replace this person within 90 to 150 days. That’s three to five months without a critical skill set in the business.
Any one of us who has anything to do with IT will be able to intuitively understand and feel the extent to which the skills shortage is hurting businesses. There are various reports all telling the same story. Recently, a South African IT news publication ran the results of an SAP report which found that 73% of South African companies expect to experience a skills gap within the next year, that four in five businesses are currently reporting a lack of tech skills and that 41% say the staff they do have are leaving because of the added pressure they feel.
On the other hand, businesses have a solution to this problem – a solution that they are already accustomed to. Outsourcing is a time-tested strategy to get access to skills and expertise without having to source, train and retain them themselves. As such, businesses would do well to outsource their IT functionality to deal with a crippling skills shortage in a cost-sensitive environment.
Let’s look at three immediate benefits of outsourcing:
It will bring down costs
When a business outsources it gains access to aggregated skills. In other words, it buys privileged access to an array of important skills. This aggregation is important. For instance, a business could hire a firewall engineer who sits idle for 40% of the time. This is not imaginary, we see it all the time. In a cost-sensitive environment, being able to gain access to crucial skills for less than 30% of the cost is a compelling option.
IT is no longer break-and-fix
Modern businesses have far more serious considerations when it comes to their technology. Perhaps in years gone by, if a computer or printer broke it could be fixed or replaced and life would get on as normal. Nowadays, because IT is fundamental to the survival of a business, if something like a backup goes wrong it could potentially be fatal to the business. There is far too much risk involved to simply treat IT and crucial IT skills as an afterthought.
Access to best practise
Imagine for a moment that a manager parted ways or was fired from a company years ago. Now imagine that this manager still had access to your systems and was periodically coming into the system to access sensitive data. This is the stuff of nightmares. Best practice, from policies and procedures when staff leave a business’s employ, to cybersecurity, to support – and much more – is crucial. Professionals who work in the environment day in and day out bring best practice to the equation. Outsourcing to a partner buys access to an entire team of IT specialists.
While outsourcing IT functions has always been a good option, it has never been more urgent to deal with the critical skills shortage in a tough economic environment. The time to look at managed services has well and truly arrived.