Insight

Commercial Insight: When should businesses engage external expertise?

Insight

When to outsource

All businesses understand that they can’t possibly operate without the help of third parties but the decision of when to manage requirements in house and when to outsource can be a tricky one.  Some decisions need no consideration at all; manufacturing organisations need a whole supply chain of raw materials and components suppliers to help them operate.  And there is no other option than buying in tech such as laptops, desktops, mobile phones, printers etc with associated off-the-shelf software.

However, there are some purchases, particularly in the consultancy space, where the decision seems a much harder choice.  For some organisations they do a simple comparison of day rates v internal resource costs and decide that it is ‘cheaper’ to do it in-house, whatever the ‘it’ is.  This could be the case in some situations if the requirement is relatively simple and/or you have people in your organisation with capacity and the right experience.   However, for some specialist knowledge, simply comparing day rates to internal costs means you are not looking at the whole picture.  Just as you buy tech from a third party because they have invested in R&D and iterated the products over a number of years to bring you a value for money performant product.  So too with consultants – or the ones worth engaging anyway!

What are the benefits?

  • Expertise: They will have spent a long time building and developing their skill set, working on projects or issues like yours many times before with similar and different types of organisations, learning a lot in the process – learning they can bring to your project or activity, allowing you to get to the result either quicker or more easily, or both.
  • Market knowledge: Using internal resource may not give you access to this wider view or it might be something you would have to pay extra for. This knowledge will come as part of the package.
  • Flexibility: Brought in to complement your existing skillset, they don’t have to do everything. If you are clear about your gaps up front, you can tailor their input and deliverables so you only pay for what you need, using them where they can add the most value.
  • Objectivity: not being part of your organisation means they can provide impartial advice based on the data and their knowledge, rather than any internal politics. They can also provide a fair challenge to your thinking and guide you in terms of best practice.

An area where this type of specialist consultancy works well is in Software Asset Management and Commercial Services, particularly where the large software houses are involved.  With complex commercial arrangements that change all the time, engaging experts who work with these vendors on a daily basis ensures you will always have access to the latest commercial strategies and approaches to best manage your estate.  The alliance of ITAA provides a wraparound service covering SAP, Oracle, Microsoft and IBM along with additional commercial support for your wider IT estate as required.

For more information on ITAA’s services: itassetalliance.com

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