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| Solutions for Our Times |
| For further information and to receive complete copies of any of the white papers you see here, Contact Al Uretsky, Managing Partner Estrella Partners Group, LLC Tel.: (623) 594-9283 auretsky@estrellapartners.com |
| Retained IT Staff; No “One Size Fits All” Model By Al Uretsky Managing Partner Introduction Retaining good IT staff on behalf of a client organization is no simple task. They face issues with regards to competitive rates, contracts, benefits, environment, locations, safety, liabilities, quality, and more. So, how do organizations determine if they have the right model of retained staff? How much of a firm’s IT should be outsourced vs. internal resources? What is the right level of shared responsibility between a service provider and a client organization? What are the typical billing models leveraged by service providers? How does one manage the communication process with their services providers? The simple answer is to be honest and forthright with your services provider / client and they will in return treat you with the same level of respect and good faith. This paper will touch on some of these issues, primarily addressed from the perspective of the services provider. Successful size / ratios for a retained staff model Best practices will indicate that there is no set of parameters that fits most or even all situations for a successful model of retained staff. Those organizations that look to drive their sourcing activities based on a scientific / mathematical approach around some percentage of their internal staffing or as a percentage of their technology spend, will find themselves facing additional issues around effectiveness and that is part of the problem in many unsuccessful outsourcing endeavors. I have personally seen this ratio vary in organizations from 0 – 100%, dependant on a number of variables, mostly on the philosophy of the executive officer. Some executives will take the stance that if they do not have the skills internally to support their operations then they don’t have the right resources, and rather than looking towards retained staff they replace internal staff. This is short sighted and will not allow for the benefits associated with an outsourced model. The other extreme would be the executive that outsources their entire IT department, which is more acceptable in smaller organizations due to economics, but this too has potential pitfalls that one needs to avoid. The ideal model will reside somewhere in between. The client organization must determine their level of comfort working in such a model and identify the potential risk factors with doing so. There is always risk in such arrangements, but if an organization understands their risk tolerance level and is aware of the potential risk factors, it can be done. Retained staff by default does not equate to risk, but rather needs to be managed to some degree, be it billing, contracts, SLAs, expectations or milestones. It really depends on the client organization and how business and IT interact / align with one another. The level of retained staff should be based on the client’s overall strategy. Clients should be looking for retained staff in areas that are not part of their core business and areas in which they do not have, or can not afford, subject matter experts. Another consideration is whether IT is strategic to the company’s product delivery or primarily a support or admin function. To the extent that it is strategic the formula for outsourcing percentage can and should change dramatically. Another key decision criterion is what the CEO hopes to accomplish from the specific outsourcing exercise. It is strongly suggested that the ratio of retained staff be determined on a case by case basis for each client organization after first understanding their technical and business environment, funding levels, mode of operation, internal skill capabilities and risk tolerance. For further information and to receive complete copies of any of the white papers you see here, contact Al Uretsky. |