Sourcing strategies

For many mid-sized businesses still getting comfortable with their fast-expanding use of IT, outsourcing has become increasingly important.

At Denmaur Papers, a technology-driven paper merchant, outsourcing has proven pivotal to the company’s success. “We don’t do anything that hasn’t got IT embedded in it,” says David Manning, finance director at Denmaur. By using outsourced IT services – at least when it is cost effective and workable – the company has been able to “punch well above its weight”.

According to Manning, outsourcing aids business responsiveness. “I don’t think we have any barriers to agility where IT is concerned,” he says, and that has helped the company provide customers with extranet access to information on their bulk paper orders and other critical data.

Like Denmaur, childcare services provider Busy Bees Childcare Vouchers has fully embraced outsourcing to alleviate the burden on in-house staff. Similarly, it has dispensed with the need for an IT director. “I was sick of dealing with hardware issues,” explains Jo Dalby, the company’s head of finance. By deploying hosted services, the company was able to free up physical space: “We moved the servers out and reclaimed our meeting room,” she adds.

In M businesses, where technical staff are often thinly spread and business processes are constantly evolving, organisations frequently develop strong dependencies on particular individuals. By outsourcing certain functions, says Dalby, she does not have to worry about an over-reliance on any one individual’s skills or, indeed, keeping those skills up to date.

Outsourcing, however, does not work for everyone. Others such as Jon Curry, head of ICT at Cornwall’s Eden Project environmental complex, feel that their organisations are simply too small to derive the cost efficiencies that can flow from outsourcing.

Stuart George, finance director at hi-fi systems specialist Audio Partnership, is also wary of the strategy. “We do not outsource any more than we need to and we try to stay in control of it,” he says. But, like Dalby, he adds: “We have concerns about the dependence you build up on individuals.”

For many medium-sized businesses, software-as-a-service (SaaS) offers a cost-effective, low-hassle means of deploying applications that often precludes the need to commit to long-term contracts. Audio Partnership already deploys some SaaS, says George, and he believes adopting the approach on a larger scale could help the company address issues of scalability – a critical factor that all M businesses face.


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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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