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Five key questions every organization should ask before outsourcing its IT operations
Does It Make Sense to Outsource?
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contents
How can we improve the efficiency and profitability of servicing our business?
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What IT tasks or processes support our business objectives?
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What are the gaps between our firm’s growth and our ability to deliver?
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Do we have the infrastructure and expertise to manage risk and defend against cyberthreats?
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How can we reduce our costs?
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Assessing your IT strategy
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Introduction
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5 Key Questions to Ask Before Outsourcing Your IT Operations
Accelerate your growth with managed IT services
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Regardless of what business you’re in, your top priority is delivering to your customers. Organizations succeed when resources – whether it’s staff or budget – are focused on core competencies. IT departments are an integral part of the value chain, but challenges such as rising costs, increasingly complex and/or outdated tech stacks, lack of in-house expertise, inefficient operations and heightened security concerns are hampering the effectiveness of many organizations’ IT strategy.
ASSESSING YOUR IT STRATEGY
Did you know?
Jonathan Silverman Director of insurance solutions, Microsoft
Insurers are recognizing the value of having access to unlimited compute capacity for risk modeling and . . . making substantial cost savings with infrastructure related to the risk modeling workload.
A managed IT services model provides a flexible, scalable way to streamline operations, maximize efficiency, reduce talent risk, access modern IT and improve your cybersecurity. But realizing the benefits of managed IT services requires some upfront assessment. Conducting an in-depth evaluation of your overall IT business model is important but, at a high level, you should consider five key questions.
Source: The 2023 State of IT, SWZD
IT budgets are expected to grow by 13% YOY in 2023, but how much is your current IT strategy contributing to key business objectives and growth? If your IT operations are not adding value and enabling you to provide better customer and employee experiences, you have options to redirect your focus on driving innovation and achieving better outcomes for your business.
Insurance companies are more aware than ever of the wealth of information at their disposal. Their ability to extract value from data using advanced analytics has become critical to competitive advantage.
For actuaries, the pressure is on to gain greater insights from big data and rapidly transform modeling results into business intelligence.
Rick Yuan Head of actuarial modeling and transformation, AIA Group
We needed to run a projection tens of thousands of times to come out with a range of possibilities. One solution was to purchase more hardware, but the obvious winner was move to the public cloud. The beauty is you can tap that capacity when you need it and switch it off when you’ve finished the calculation.
1. HOW CAN WE REDUCE OUR COSTS?
The goal of IT is to streamline your business operations and drive top-line growth, but IT is often more of a cost-center rather than a revenue generator. And that’s OK – in a modern, digital-first world, IT spend SHOULD be increasing! For example, the amount spent on protecting data is likely exponentially higher now than it was 10 years ago. However, outsourced IT reduces costs in many other areas of expenditure. When assessing your IT strategy, you should first determine where and how you can minimize spend and realign your resources to more strategic areas. In other words, what parts of your IT operations make the most business sense to outsource?
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Although cost savings are typically realized, your primary motivator for outsourcing IT operations shouldn’t be saving money. A modern IT strategy will streamline your operations, improve business agility and enable you to provide enhanced experiences for your customers and employees.
By partnering with an external team to outsource your IT services, you can save money by paying only for what you need, when you need it, with all your costs rolled into one fixed monthly payment that easily fits into your budget.
Consider working with a trusted managed service provider (MSP) to help:
Provide the framework needed to scale your business quickly, using a predictable cost model Handle infrastructure planning, improvements, maintenance and unplanned work Reallocate internal resources more strategically with a focus on core competencies Implement innovative technology solutions and expand your investment options to better serve your clients
Managed services with the right partner can help companies increase operational efficiency by as much as 65% and reduce IT costs by as much as 45%.
Source: Trigent, 2022
2. DO WE HAVE THE INFRASTRUCTURE AND EXPERTISE TO MANAGE RISK AND DEFEND AGAINST CYBERTHREATS?
David Elliott Architecture manager for financial services, Amazon Web Services
For insurers, the question isn’t "if" (they will migrate existing applications to the cloud) – it’s how fast they can move and what are they going to move first?
Holistic threat management across your entire technology stack
With cyberthreats rising exponentially and data protection rules becoming stricter, a strong cybersecurity and risk management strategy is a top priority. Tools and processes must be constantly upgraded to keep up with changing threats and compliance requirements, requiring not only new technologies but dedicated staff that are experts in the fields of cybersecurity, risk and compliance.
Source: VentureBeat, 2022, IBM, 2022
Working with an MSP can provide:
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Phishing attacks increased by 61% YoY in 2022, with 255M total attacks detected. The average cost of a data breach in the U.S. was $9.44M million in 2022, the highest average on record. Keeping up with modern technology to protect your business from cyberthreats is expensive and time consuming, especially for in-house IT resources that may already be stretched thin. Professional outsourced IT providers work with many organizations across many industries and have a strong line of sight into cybersecurity, regulatory and compliance developments in the industry.
24/7/365 monitoring by security experts
Maximum protection across your entire network with tools that rapidly detect, analyze, investigate and respond to threats with mitigation and containment protocols
Up-to-date compliance for regulatory reporting requirements
Chief risk officer Major insurance company
The accommodation of large data sets, highly demanding algorithms and the hardware for instant computational resources make the cloud ideal for large-scale data analysis.
3. WHAT ARE THE GAPS BETWEEN OUR FIRM’S GROWTH AND OUR ABILITY TO DELIVER?
Growth can often be limited by your ability to support the initiative operationally or the technology needed to execute it. An experienced MSP can help you overcome these obstacles by:
Consolidating outsourced IT under a single, unified partner umbrella helps lower risk, improve cybersecurity efficacy, streamline support and reduce costs.
Designing a consolidated end-state based on best practices and expertise Providing the ability to scale-up operations quickly Helping you adjust easily and quickly to market and regulatory changes Mitigating staff challenges and freeing up resources to focus on key business priorities
Source: Gartner, 2022
According to Gartner, 75% of organizations are pursuing security vendor consolidation to improve their overall risk posture and reduce spending on licensing.
4. WHAT IT TASKS OR PROCESSES SUPPORT OUR BUSINESS OBJECTIVES?
Holistic threat management across your entire technology stack Maximum protection across your entire network with tools that rapidly detect, analyze, investigate and respond to threats with mitigation and containment protocols 24/7/365 monitoring by security experts Up-to-date compliance for regulatory reporting requirements
Assessing your IT infrastructure will help you determine which activities enable you to accomplish your business goals and which do not. A partner with extensive experience in IT services can help you identify:
A partner with domain expertise, best practice processes and access to premier technology can easily deliver and improve on many common IT tasks and business processes. Select an MSP with a proven track record of helping organizations like yours to transform their service models.
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Activities that do not add value or allow you to deliver a better client experience Opportunities to reduce cost, increase scale, remove key person risk and/or mitigate operational risk
You may be surprised by how “right sizing” your IT operations can help your firm deliver better client outcomes, shift to a more predictable cost model and enable you to focus on business growth.
5. HOW CAN WE IMPROVE THE EFFICIENCY AND PROFITABILITY OF SERVICING OUR BUSINESS?
Unless your firm is large enough to deploy interchangeable resources that can shift between functional areas, you should explore opportunities to better support innovation, growth strategies and key person risk mitigation. Outsourcing some or all of your non-strategic IT operations is a great way to shift attention to activities that strengthen your core competencies and deliver for your clients. Many firms like yours are looking to outsource IT infrastructure and processes that lack scale, are subject to talent risk or do not deliver a competitive advantage. The right partner should be able to provide flexible technology deployment options, a variable pricing model and the staff you need to meet market demands.
Consolidating outsourced IT under a single, unified partner umbrella helps lower risk, improve cybersecurity efficacy, streamline support and reduce costs. According to Gartner, 75% of organizations are pursuing security vendor consolidation to improve their overall risk posture and reduce spending on licensing.
Source: IT Outsourcing Report, Statista, 2022
The IT outsourcing industry is growing at a CAGR of and will be worth a market volume of $587.3 billion by 2026
Source: Clutch, 2021
SMBs planned to outsource at least some of their work in 2022 with IT as the most outsourced department among them at
Source: Statista Outsourcing Penetration Report
of U.S. companies with 50 or more employees and of global Fortune 500 companies outsource part of or all their IT operations
8.93%
90%
66%
99%
37%
Visit the FIS® Managed IT webpage to learn more
Whatever your firm’s growth strategy, the people, processes and tools offered by a managed IT services partner can help you realize topline benefits while avoiding the fixed expenses that can drain your budget and resources. Outsourcing provides you with a flexible, scalable model to meet your current and future business needs and growth – empowering your firm to capture a larger share of the market at a higher profit margin. Join the ranks of the many organizations who have already moved past the need to do everything in-house and made the choice to outsource critical IT operations and infrastructure to a trusted MSP partner. A managed IT services model can provide a solid foundation to help you run your IT operations efficiently and cost-effectively, freeing you and your team to concentrate on exploring strategic ways to be more innovative and delivering better results to your customers.
ACCELERATE YOUR GROWTH WITH MANAGED IT SERVICES
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FIS is a leading provider of technology solutions for financial institutions and businesses of all sizes and across any industry globally. We enable the movement of commerce by unlocking the financial technology that powers the world’s economy. Our employees are dedicated to advancing the way the world pays, banks and invests through our trusted innovation, absolute performance and flexible architecture. We help our clients use technology in innovative ways to solve business-critical challenges and deliver superior experiences for their customers. Headquartered in Jacksonville, Florida, FIS ranks #241 on the 2021 Fortune 500 and is a member of Standard & Poor’s 500® Index.
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