With a shortage of IT talent in the UK, charities face an uphill battle to attract staff against inflated corporate wages available to IT professionals elsewhere. Many IT teams are finding it harder to source, fund and retain the multidisciplinary mix of specialist skills needed to run a modern not-for-profit’s technology estate.
We undertook a research exercise this year and found that over 50% of medium and large charities are considering outsourcing components of their IT function to specialist providers. This figure is even higher in the areas of Cyber Security and IT Training / Digital upskilling.
By entrusting an expert partner to manage specific areas of your IT estate on a part- or full-time basis, charities can simplify operations and free up internal IT resources, often at a lower cost than hiring full time equivalents. However, outsourcing does carry risks that need to be managed, so choosing the right partner(s) is crucial.
Smartdesc are outsourcing experts who have helped many charities redesign their IT Target Operating Model, typically blending in-house staff with outsourced specialists in a hybrid structure to achieve the right mix of accountability, service levels, cost, and expertise.
In this guide we share our 6 steps to “Smart Outsourcing”, helping you plan and execute an outsourcing strategy to ensure your IT function has the blend of expertise needed to run a modern technology estate.
Start by considering whether a fully outsourced or a hybrid model is most appropriate for your needs (it can also be phased). Both models can work well, and often the size of the organisation plays a part. In our experience, once staff numbers exceed 60-100, having an internal full time IT role or roles provides an important linchpin, joining up the business with the service of an outsourced provider. Outsourcing could equally be applied to 1 or 2 specific roles; it doesn’t have to be whole teams or functions. Often IT Leadership roles like IT Managers, Service Delivery Managers, or Heads of IT can be part time and provided as-a-service to control cost but ensure the IT Strategy keeps evolving.
Equally, outsourcing the IT Helpdesk or Infrastructure Maintenance can be a good way to free up existing internal IT staff to work on more appealing and developmental areas like IT efficiency improvements, better ways of working, and generally engaging with business stakeholders more closely to help ensure IT makes their jobs easier and more effective. To minimise risk when undertaking these outsourcing transformation projects, consider a staggered rather than a big-bang approach. Start by outsourcing a sub-function, team, or even one or two roles. As trust builds with your partner, you may then choose to outsource more to them if this feels like the right fit.
Look beyond slick sales presentations and instead ask for evidence of the partner’s growth rate, customer base, retention rate, certifications, recommendations from trusted bodies and case studies. Charities should consider whether the company’s culture and size are a good fit; do they work extensively in the Third Sector, and do they understand the unique challenges and inner workings of a charity, or are they focused on the corporate sector with a small sub-set of charity clients?
Explore their track record of success in detail at other non-profits; speak to references and ask direct questions about how they’ve overcome difficulties or challenges in the past, as this often highlights their culture and ethos when the pressure is on.
Each IT company will have its own specialisms. You should choose a partner whose expertise aligns with your current technology or where you want it to be, and ensure they can align the solutions with your charity missions. Ask for evidence of previous charity IT projects they have delivered, and certifications or accreditations in the relevant areas.
Depth of experience is important too; how many staff cover a particular function? Is there one subject matter expert, or is there a whole team you will have access to? How will they structure the proactive partnership with you – horizon scanning, sharing best practice from other organisations with similar aspirations, what does their reporting look like to track service quality?
In an effective partnership, you should both share risk in your commercial arrangement, and this can be tested during pre-sales engagement. For example, what does an exit look like, and what levers will you have if service levels aren’t meeting expectations?
Be cautious of low-cost, flat-rate outsourcing arrangements – what happens if usage exceeds anticipated demand and could that destabilise their ability to deliver? Scrutinize the contractual arrangement carefully; seek advice from a Commercial Director or a recommended consultant if necessary.
A partner’s culture can make or break the partnership/relationship, so it’s important to consider whether the partner’s values align with yours at an early stage. Who is running the company? Does the partner take responsibility for good – and undesirable – outcomes? Learn as much as you can about their culture throughout the pre-sales process by speaking to the partner’s team and staff members on the ground, find out about their staff retention rates, how they handle career development with their staff, and discussing internally with your colleagues to get their opinions too.
Outsourcing your IT is not just a transition for your IT team, but for your whole organisation, so effective internal communication is crucial. You may need to set up new communication channels – if you have an internal communications manager they may be able to help with this. Be upfront, transparent, and honest with your staff about what changes are being made and why, what new opportunities will arise, and the next steps. First impressions count, so introducing the new provider and their staff at an all-hands / Town Hall is a great way to put faces to names.
Consider building in physical presence of the new provider, so people see them and interact with them; the relationship is arguably the most important part of any good partnership. Be constructive and supportive; the provider will be very eager to get regular feedback from all levels of the organisation, and this is as much your responsibility as theirs. Commit to regular reviews, and ask your staff regularly about the service, people, and quality of what is being provided, to help set up the relationship for long term success.
Outsourcing can be daunting, but done right it is extremely powerful; we know of many charities who use a hybrid, blended outsource / in-house model to great effect, with partners being alongside them for years, and most staff not evening knowing that some of their IT team aren’t full time colleagues.
By following these six simple steps, we hope you can benefit in this way, whilst reducing the transitioning risks and establish a successful, long-term arrangement that benefits the whole organization.
To arrange a free IT consultation with one of our directors to discuss our hybrid ‘Smart Sourcing’ model and how we can help improve IT effectiveness at your organisation, please email: email@example.com.