Soaring inflation in Europe, energy crisis, war in Ukraine, the World Bank has just sounded the alarm on a risk of recession for 2023. Whether this major crisis starts or not, the challenge for CIOs in 2023 will be to preserve their company’s cash flow and save money wherever possible. Already, the departments have allocated extremely constrained 2023 budgets to their IT departments. Finding sources of savings on this budget when we are already in January is going to be a particularly perilous exercise.
To optimize its cost structure and create room for maneuver in order to increase the digital transformation of their company and the modernization of businesses, CIOs must rationalize their expenses, in particular those related to the “Run”, i.e. operation of their infrastructure. Given the usual inertia of cost reduction measures, outsourcing appears to be the only real solution for freeing up resources before the end of the year.
Infrastructure management has become standardized
While large companies have activated this lever of outsourcing for years, it is the turn of the midmarket, our SMEs and SMIs, to accelerate the outsourcing of the management of their infrastructures.
Very often, their IT equipment is still hosted internally. However, it is now accepted that a company no longer has any real interest in managing its IT infrastructure itself. These are standardized tasks on which no company can really differentiate itself. The advantage of this standardization is that infrastructure management can easily be outsourced to a third party. A specialist can be entrusted with the day-to-day management and optimization of a company’s entire infrastructure within very short implementation times. In this way, the company can expect a ROI (return on investment) very quickly and thus have an almost immediate impact on its 2023 budget.
Given the current uncertainty, no CIO is ready to invest in an infrastructure project whose ROI is expected over the horizon of several months, or even several years. Outsourcing is the only way to obtain an ROI from 2023 and a standardized “as a service” type service allows very rapid implementation and smoothing of costs with a monthly invoicing method.
A way to deal with the problem of lack of human resources
In addition to the strictly financial aspect, outsourcing is also a way of dealing with the problem of the lack of human resources in the IT field, whether it concerns current or future skills in the sense of GPEC (provisional management of jobs and skills) . By entrusting its existing system to a specialist, the DSI will be able to concentrate on supporting businesses in their transformation and no longer feel the lack of skills in the field of infrastructure administration. Today, a CIO has much more need for project management assistance, architects to design modern applications, product owners, much more than technicians specialized in infrastructure layers.
Infrastructure has clearly become a commodity. It is much more automated than in the past and requires far fewer hands. So rare on the job market, experts are now pooled among specialists who offer these outsourcing services. Only these specialists can maintain skills on end-of-life platforms for which it becomes impossible for CIOs to maintain a position or even find candidates. To be pragmatic, pooling these increasingly rare resources is now an imperative.
An approach that builds resilience against cyberattacks
Outsourcing is also a way to prepare for a cyberattack. All cybersecurity specialists repeat it: a leader should not ask himself if his company could be attacked, but when it would be. You have to prepare accordingly. The outsourcing of infrastructures will make it possible to rebuild the information system much more quickly after a cyberattack and to restart applications as quickly as possible. Backup solutions in the Cloud are now relatively simple to implement: an outsourcing approach will make it possible to set up an efficient DRP (disaster recovery plan) and no longer rely on local backups random reliability.
The service provider must be able to provide its client with business continuity for its infrastructures. This goes through two areas: on the one hand, being present throughout the life cycle of the infrastructure, from its design, its integration, its production, then the maintenance and management of equipment at the end of its life. On the other hand, during the production phase, it is necessary to manage both the existing, that is to say sometimes obsolete legacy platforms and modern hybrid infrastructures. A single global outsourcing contract is a strong lever for reducing costs.
In conclusion, faced with this risk of an economic slowdown, SME managers must take quick decisions both for their “core business” activities and to rationalize support functions, including IT. They no longer have time to enter into long cycles of calls for tenders, competitive evaluation of tenders and contracting. The SME boss must rely on standardized offers, require a short ROI and make his decision on this result commitment. The speed of decision-making is the only immediate action lever to respect all the commitments and the budget of the DSI.