IT Functions ‘as a Service’: is it Time to Bite the Bullet?

One thing all firms agree upon, is that we will not fully go back to how things were in professional services before the pandemic. COVID has transformed how firms work, how they service their clients and how – and where – they expect their people to work, with varying degrees of agile, flexible and hybrid working models emerging.

Now the dust is starting to settle, and firms are articulating their people and premises strategies, how can we support our IT teams in this new working environment? And what should we be expecting of them?

In this latest article for Alternative Insights, the Lights-On team discusses new strategic challenges facing professional services firms and their IT teams, with insights into the different ways to source your IT Service, and how this can enable IT professionals to focus on adding value and supporting an improved client experience.

What has changed since the start of the pandemic?

From a technology perspective, the pandemic has had a lasting impact and accelerated many developments that had been quietly bubbling away. IT infrastructure and support needs have changed with people working at home and across much longer hours of the day. The change has also coincided with an increase in cyber-attacks presenting strategic and risk management challenges.

IT professionals tell us they are working harder than ever, just to keep the lights on. New and exciting technology is being made available so quickly, yet it is a struggle to find the resource to focus on improving the client experience or deploying innovation.

This is prompting many firms to review how they deliver the commodity elements of their IT service, to allow their IT teams to be closer to the business, more proactive and to focus on getting the best out of the current and future technologies.

Balance sheets and cash flow forecasts are also showing that IT costs are shifting from capital expenditure and into the operating expenditure, with subscription-based ‘IT as a service’ models having widespread adoption.

Within the Lights-On client base, we are seeing four key areas of focus for senior leadership teams and their IT professionals:

  • Efficiency and productivity
  • Hybrid and agile working
  • Sustainability
  • Cybersecurity

If you are trying to resolve all these in-house, you could arguably end up with an in-house IT team that is bigger than any of your practice areas.

Sourcing from a ‘managed service provider’ can give you the opportunity keep the value-add and strategic work in-house and deliver the commodity work on a pay-as-you-go basis.

New skillsets and new mindsets

Pivoting your IT team to a supplier management and innovation role can feel like a hefty step, one that requires not only new skills but also a shift in mindset, both in the leadership team and in the IT team.  Small steps can sometimes be a good way of testing the water – for example, delivering disaster recovery as a service before launching into a full cloud migration.

Where should you start with identifying a potential managed service provider?

As you’d expect, not all providers are created equal! They will offer different solutions and different levels of service. Your first job should be to clarify your pain-points and strategic challenges to understand what you want to keep in-house – and what could and should be delivered ‘as a service’.

We can’t stress enough the need for thorough due diligence during the selection and procurement stage.  Contract properly – and agree the exit terms before you sign. We have witnessed some horror stories where businesses have not been able to extricate themselves, with one situation where a law firm had to pay for a further 12 months to avoid being ‘switched off’.

As part of the procurement process, agree exactly what the MSP will do for you and how you will measure the success of their work. This is not an ancillary service – this is your firm, and you need to get the provision right and also be able to remediate where necessary. If the provider is to be managed by the IT team, you’ll need to make sure they have strong supplier management skills.

One last piece of advice: never outsource a problem. You will miss out on the opportunity to learn how to solve it – and how will you know if the provider has given you the most effective solution?

When is the right time?

Changing how you source IT may not be right for your business today, but there is an inexorable shift towards the ‘as a service’ model. Timing may be influenced by where you are in your investment cycle or it may be driven by the more pragmatic needs for more resource, more expertise within the IT service provision. Recognise however, that sourcing elements of your IT is rarely about saving money! It is about strategic sustainability, driving efficiencies and productivity and risk management.

Successful as-a-service models can free up your valuable in-house IT resource and enable them to help drive change and an improved client experience.

Contact us if you would like to talk more about this within your firm.

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