The ITAM Review

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Outsource ITAM or keep in-house?

When should you outsource ITAM to a third party? When does it make more sense to keep resources in house? This article is in response to an ITAM Review reader question as follows (edited for brevity):

“I’ve recently become the ITAM Leader at <Company>. Where I’m needing help is around a few key topics my new management is asking. <Company> is in <financial services sector> and ITAM is not considered a core competency.   So, I’m really trying to figure out if I should build the skills/processes internally or not. 

“Are there any benchmark studies where I could see metrics around things like (For a company like ours, similar industries and size, what their spend is to run the Business Operations Service side of IT Asset Management)? Example: So, if we spend $1M to run our program … is that in line with others in our size.”

I’m not aware of any studies that show how much an organization should be spending on ITAM. I suspect someone like Gartner might have these, Big G also quotes things like “Orgs should spend 5% on Software License Management” etc. Our salary survey back in 2014 showed team size versus number of assets which might provide an indication. We will revisit this salary survey for 2017.

Whilst comparison to other organizations is useful I prefer a more pragmatic approach, which says:

  1. How much risk do you have?
  2. How much risk can you tolerate?
  3. How much do you want to spend to reduce that risk?

When communicated in purely financial terms in this way: ITAM departments get funded. We cover this approach in more detail in the AUTHORITY, PLAN and TEAM modules of the 12 Box training course (available on demand free at the time of writing). Also check out the case study with chocolate company Hershey who run ITAM as a zero cost operation.

Should you run things internally or not? By the time you’ve got Authority in place and written a business plan, you build a team to deliver against the business plan. At this stage it you’ll have a shopping list of expertise, you can then make a judgement on whether to source internally or not. I cover what I consider are some of the strengths and weaknesses below (Note that some outsource ITAM because they can’t find or retain the right staff; it isn’t necessarily out of choice).

People mainly outsource to gain access to expertise, not because it’s a cheaper option:

Outsource

Why did you choose to outsource? Source: ITAM Review 2015 SAM Managed Service Provider Group Test.

We cover how to select a SAM managed service provider in a webinar in January (Video available on demand with registration here: http://itam-review.teachable.com/).

Outsource ITAM or keep in-house?

What are the preferred qualities of SAM Managed Service providers. Source: ITAM Review 2017 Buyers Guide to SAM Tools and MSPs

“Are there any whitepaper studies around “insourcing” verses “outsourcing” (the HAM and SAM functions/services)? Including pros/cons”

We’ve conducted studies in 2013 and 2015 into SAM Managed Service providers:

These tests looked at what people are outsourcing, why they are outsourcing it and key market drivers, although it is heavily weighted towards SAM over broader ITAM.

“Also, any industry numbers referencing percentages that do “outsource their IT Asset Management services? I saw this data below but was unsure if it was only focused on “software”?  I need to consider both hardware and software IT Assets.

‘Early results suggests 60% of survey respondents have a SAM tool in place, 67% make use of a SAM Managed Service provider (bear in mind this is the ITAM Review audience, active ITAM practitioners, not the IT industry as a whole). Average satisfaction with the SAM MSP is 7.70.”

That quote came from our survey in December 2016 (Again, we presented the full results in our webinar in January 2017 available on demand here: http://itam-review.teachable.com/). As it suggests in the quote, this is from ITAM Review readers, my guestimate is that adoption of SAM Managed Service Providers is within single digit percentages for the IT industry as a whole but I would love to see concrete research / figures into this. I suspect it is a lot higher if you include traditional outsourcers supporting everyday ITAM processes regarding desktops and devices.

Pros and Cons of Outsourcing ITAM

Pros

  • Frees up time to do more strategic ITAM
  • Less dependency on recruiting highly specialist resource
  • Lower risk execution (because you are buying an outcome not a bunch of component parts and doing it yourself)
  • Experience factors (since the outsourcer would have done the same thing for many other customers)

Cons

  • Higher cost option in the longer run
  • Intelligence gained in execution is not always integrated or leveraged in-house
  • Responsiveness might not be as good as in house teams
  • Motivation of the outsourcer might be primarily focussed on maintaining the recurring revenue of the outsource contract rather than your business goals

Finally, you can’t outsource risk or responsibility but many of the Cons above can be addressed with a well balanced deal with the outsourcer.

We plan to revisit our SAM Managed Services provider group test in 2017. Please contact me if you wish to participate, nominate your partner or provide feedback.

Are there any pros and cons I have missed or research you can point to? Please let me know in the comments. Thanks, Martin 

About Martin Thompson

Martin is owner and founder of The ITAM Review, an online resource for worldwide ITAM professionals. The ITAM Review is best known for its weekly newsletter of all the latest industry updates, LISA training platform, Excellence Awards and conferences in UK, USA and Australia.

Martin is also the founder of ITAM Forum, a not-for-profit trade body for the ITAM industry created to raise the profile of the profession and bring an organisational certification to market. On a voluntary basis Martin is a contributor to ISO WG21 which develops the ITAM International Standard ISO/IEC 19770.

He is also the author of the book "Practical ITAM - The essential guide for IT Asset Managers", a book that describes how to get started and make a difference in the field of IT Asset Management. In addition, Martin developed the PITAM training course and certification.

Prior to founding the ITAM Review in 2008 Martin worked for Centennial Software (Ivanti), Silicon Graphics, CA Technologies and Computer 2000 (Tech Data).

When not working, Martin likes to Ski, Hike, Motorbike and spend time with his young family.

Connect with Martin on LinkedIn.

3 Comments

  1. Duncan Jones says:

    Pros:
    1. Cheaper, through economies of scale & industrialized processes
    2. Knowledge of leading SAM tools so you don’t have to spend time selecting and implementing one
    3. Often bringing their own software, such as productized integration between a SAM tool and an ITSM tool
    4. Service continuity, not dependent on you retaining one or two key individuals
    5. More focus on measurable results, such as avoiding wasteful software spend, because the outsourcer has to continually justify its existence

  2. The problem I have with the debate over SAM done in-house or outsourced is that they are rarely like-for-like comparisons.

    Outsourced will always look more expensive because the full cost of doing it in-house is not correctly calculated. On the flip side, if the in-house team were to be given the same amount of money as would be invested in a 3rd party maybe they could easily deliver the same or superior service

    There are a few additional Pros for the list over on a post I did a while back http://bit.ly/2rTUhlr

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