For about as long as companies have been able to outsource IT services, senior finance executives have identified saving money as the most common reason for doing so. This made sense. Third-party IT specialists, combining scale with domain expertise, were able to deliver cost efficiencies few companies could hope to achieve on their own. But now, as managed IT services have matured, the benefits of outsourcing the information technology function have become broader and more strategic.
The Virtual CIO
These findings dovetail with the evolution of managed IT from something used primarily to provide tactical capabilities to a more mature, higher-value service. For many finance executives, the benefits of the newest offerings in this field handily outweigh traditional concerns about cost and quality. These offerings can assist companies in creating a strategic vision for the IT function, deliver “virtual CIO” capabilities, and help companies navigate their transformation into digital enterprises.
The ultra-speedy pace of technological change, perhaps combined with the ubiquity of business process outsourcing after decades of refinement, appears to have given finance executives a stronger appreciation for outsourcing IT functions than they once had. Most now believe they can gain continuous access to top-shelf technology—and still improve the predictability of their costs— by embracing a managed IT approach. Indeed, nearly seven in 10 finance executives polled in the latest CFO Research survey—69 percent—agree that a trusted IT services provider can do a better job than the typical company can do on its own. And 60 percent say they would be comfortable having a trusted managed IT services provider deliver not some, but all, of their company’s IT functionality
CFO Comfort Zone
Among the survey respondents who say they would still be more comfortable trusting only a subset of their IT functions to a managed IT provider, more than half say they’d be most willing to hand over responsibility for data backup and recovery operations (62 percent of respondents), and network management with 24/7 monitoring (57 percent).
Back-up services, including cloud-based offerings, give companies access to IT capabilities and skills they might not otherwise be able to hire or afford, such as 24/7 monitoring. They also shift infrastructure related burdens, such as hardware and system upgrades, from their internal IT operations to a third party. Presumably, this allows the business to invest additional resources in more strategic initiatives.