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February 25, 2010

The ROI on Outsourcing Your IT Infrastructure

By Anshu Shrivastava, TMCnet Contributor


Return on investment is a common term, often used by the companies and marketing heads to describe profit. However, many struggle to define it when it comes to compare in-house versus outsourced IT strategies. And, when it comes to IT, almost all enterprises outsource at least some of the IT resources and activities necessary to support business operations.
 
“Outsourcing” is the process of contracting with a third-party to provide a selective list of business activities. ROI is the key consideration when deciding whether or not to outsource IT activities. Hostway Corp., a provider of domain name registration, Web hosting and e-commerce, colocation, managed dedicated hosting, and more, said that the availability of competitive outsourcing products from a diverse set of service providers should result in significant opportunities for cost reduction and improved IT performance.
 
Today, there are a number of companies that specialize in outsourcing, and enterprises should exercise care when selecting the right service provider to meet their needs. In order to effectively outsource, the enterprise IT and executive management should perform an accurate assessment of the business objectives. And, then determine the IT implications, and tangible and intangible costs of meeting those objectives through in-house and outsourced strategies.
 
Hostway (News - Alert) officials said that the decision to outsource should be an objective and financially driven initiative. The decision should be made after assessing capital requirements, business and operational risks, and the value of maintaining the enterprise’s focus on core business activities and competencies.
 
The white paper, “Outsourcing your IT Infrastructure,” explains that significant ROI can be achieved by outsourcing some or all of a company’s servers and data center equipment. It talks about ROI in details, and discusses about a simple tool for analyzing the relative merits of some types of outsourcing. The paper also talks about the benefits of outsourcing. And, it contains factors to consider when exploring outsourced strategies.

Anshu Shrivastava is a contributing editor for TMCnet. To read more of Anshu’s articles, please visit her columnist page.

Edited by Erin Harrison




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