Outsourcing Gives Not-For-Profit Organizations Opportunities To Enhance Overall Information Systems Operations. Technology White Paper, January 2002, By: John S. Farhat.

In addition to people, not-for-profit organizations have one, single valuable asset. Information! And in today's world, you cannot exercise that asset or accomplish your mission without information systems. Outsourcing the support of these systems is a common practice in the private sector and government. The idea is simple: Move the operational responsibility for the computer and information systems to a partner whose full time business is running, managing, and developing systems. This allows your internal staff to focus on your own mission and objectives.

Outsourcing can take many forms, carry varying levels of support, and many possible options. The most basic and least beneficial method is the break/fix relationship. When things break, the outsourcer is called in to fix them. But as you move beyond that model you will find a wide range of arrangements that are endlessly more beneficial. Within the context of the outsource agreement, you can expect hourly commitments, or service level commitments. In many instances you will have the option of moving complete support to the outsource partner or maintain some aspects of your systems. Most agreements include many options that form the basis of your personalized plan. Some may be included free as part of the base agreement while others are add-ons. Some plans require full transition of responsibilities while other allow combined sharing between the vendor and the internal staff. By making careful selections, you are able to purchase no more than the capabilities you require, and add more capabilities as your needs change. Among others, options can include 7/24 support, Internet service hosting, electronic mail processing, training facilitation, strategic management, reduced cost implementation services, advantageous price points on infrastructure, or even incorporation of cost of hardware into the service level.

Once the options and details are hammered out, the relationship starts with the outsourcer developing knowledge of your systems and software creating a knowledge base of your basic infrastructure which becomes the basis for minimizing break and down time. Depending on the amount and complexity of your systems, the transition can be instantaneous, or may take any time between 4 and 12 weeks to complete. Once accomplished, your outsource partner's whole business, staff, subcontractors, and business partners become an extension of your organization's set of technological capabilities, thus giving you even larger capabilities in implementing and making changes as you grow.

From a people perspective, this diversity is critical because the computer profession is specialty oriented. A good network engineer, is probably not a good programmer, or data integrator. A good systems administrator may lack the capabilities to help define a comprehensive information strategy. This is where your outsource partner can shine. Instead of one full time staff member with a specific specialty, your full time equivalent may be 0.1 Strategic Business Planner, 0.5 Infrastructure and Systems Support, and 0.4 Integrator. Thus allowing you to gain three people in one. Alternatively, you may be able to select any "portion of a person" to supplement the needs of your internal staff.

On the surface, the costs associated with such an arrangement may be higher that you expect. However, when you add up the costs of the insourced alternatives, outsourcing shows its true power. First, in staff alone, actual costs including salary, benefits, all employment related taxes, recruitment costs, training costs, availability costs, and vacation/holiday costs can average about 2.3 times base salary. Secondly, the strategic management of the information systems by strategic planners avoids common mistakes of complexity building. The Gartner Group is the premier computer industry research group. In a 1998 study Gartner concluded that complexity is the single most important factor in pushing support costs spiraling out of control. Third, by relying on specialists, the outsourcer can help you accomplish your activities faster and smoother, again reducing your overall costs. By combining actual costs along with cost savings, you will indeed discover that outsourcing not only maintains a level rate of information systems expenditures, but that your total costs of ownership can actually drop.

The fully outsourced option may not be right for you at this time as you rely on volunteers and internal staff. However, it makes sense to start developing relationships with potential partners and learn about the way they do business. You may be able to start working with the partner on limited plans, in ways that can support your internal staff. As your needs change, you can transition in ways that best fit your requirements armed with the full knowledge of your partner's capabilities.



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