Member Article

Why mid-market businesses should wake up to outsourcing

Lee Ganly, CTO at Acora, looks at why mid-market businesses should look at outsourcing.

The business landscape has changed. Businesses of all sizes are facing the same pressures – a mobilising workforce; a focus on growth and return on investment; cloud and virtualisation; and IT’s shift from a basic support structure to a critical business function. Nowhere is this more evident than with dynamic mid-market businesses.

It is in this sector that the above challenges need to be addressed most carefully and quickly. There is no point ignoring the issues, they are only going to increase in prevalence and intensity. Thankfully, the majority of companies have identified these concerns and have begun to move to meet their demands.

Recent Acora research, which polled 1,300 mid-market businesses (described as any company with 50-2000 staff), found three areas that the sector is concerned with. These are increasing growth, improving general operational efficiency and strategically aligning outsourcing with business objectives.

Onwards & Upwards

Despite the current UK economic outlook, an impressive number of companies said they expect to grow this year. 50% of the respondents see tactical growth as intrinsic to future success, while almost a third (28%) forecast growth expectations of above 20%.

This might seem ambitious, but when we look at the strategies behind said growth, it doesn’t seem so unattainable. Very few of the businesses interviewed believe the growth will come through acquisition or merger decisions due to the financial capital required. More surprisingly, many believe it is not through new services or product development, but rather existing channels which will drive revenue and expansion.

However, realising these growth aims means businesses have to be equipped to deal with the increases in demands on staff, infrastructure, operations and IT, especially as many see international growth as equally important as domestic expansion. There is no point pushing growth across different geographical regions only to succumb to the demands of the modern marketplace.

Mid-market businesses are finding that with growth desires comes specific IT demands, many of which need a clear and scalable planning of strategic resources.

Opening The Door

This is where operational efficiency and aligning IT with growth comes into practice. A business is only as flexible and successful as its supporting infrastructure and IT. As highlighted above, the modern market has shifted to create a large number of computing demands which simply did not exist a decade ago.

Businesses which have succeeded in the past two years are often those that have changed their internal IT culture; moved away from viewing IT as a helpdesk to one that is a supportive, mission critical unit.

It is simple – if businesses scale their IT in line with demand, they are more likely to maintain a healthy bottom line, strong performing services and ultimately, high growth figures.

While outsourcing offers extensive support for the mid-market in terms of IT capability, at the same time providers must change to meet the demands of their clients. It is no longer possible to be a transactional, delivery based provider. Those operating in a symbiotic, supportive manner are seeing success for both themselves, and also for those they outsource to.

Growth must occur for the customer, otherwise the outsourcing provider has failed to meet their core purpose; it is as straightforward as that.

Realising Operational Efficiency

So how should a mid-market business achieve this ideal relationship? When asked, boards and C- Level management gave an indication of what needs to change internally to facilitate this shift.

Fortunately, businesses have begun to shed their indifference to IT. Only 15% of companies said they still see IT as a basic support function; 80% were clear in the belief that IT is a strategic business imperative. This is one change that must take place in all companies if they are to yield the growth they desire.

The role of IT as a strategic business imperative is further highlighted by the fact that only 50% of businesses admitted to having dedicated IT representation present when key business decisions were being made. Commonly the responsibility for IT has fallen to the FD or MD who often have little to no expertise in this area

The suggestion here is that by getting a business savvy leader to head up IT, it will become more aligned to a business strategy. In other words IT has become a business issue, discussed at board level by a non-specialist and no longer regarded as just a support function.

Once the issue of lacking IT representation changes, mid-market businesses will start to have the management support structure in place to drive forward their growth plans, as well as the indispensable know-how for implementing the required IT services which will meet said demand.

Acora delivers Outsourced IT Services to visionary mid-market business leaders who need strategic agility.

This was posted in Bdaily's Members' News section by Acora .