Businesses opt for selective outsourcing

Singapore businesses are open to third-party help for IT services like Web site development and hosting.
Written by Isabelle Chan, Contributor
The IT helpdesk is the most commonly outsourced function, and SMBs are keen to contract out application and Web site development work, according to new research.
Eighty-five percent of Singapore SMBs polled in the ZDNet Asia SMB IT Priorities 2006/07 survey plan to outsource more IT helpdesk activities, while 7.1 percent which have never done so, plan to outsource this front-line IT function.

Other areas which SMBs are keen to outsource include application development and maintenance, as well as Web site development and hosting, the survey revealed.
Graeme Philipson, an independent consultant commissioned by ZDNet Asia to compile the survey data, said SMBs which outsource do so to gain productivity improvements or competitive advantage.

Almost 40 percent of those polled have no plans to contract out backup and storage support, while 34 percent and 31 percent will continue to rely on in-house resources to handle data center and network operations, respectively.

Offering a possible explanation why some SMBs prefer to rely on their own staff to handle IT services, Christopher Low, director of technology solutions company Pendulab, said in an e-mail: "Some SMBs stay clear of outsourcing because the immediate ROI (returns on investment) may not be clear."

Low, who employs 26 staff, believes that SMBs should consider both the tangible and intangible benefits of outsourcing. These, he said, include leveraging on the expertise and experience of IT vendors, concentrating resources on their core competencies, achieving a leaner organization, and getting a higher service standard and quality software products.

The decision to outsource hinges on the mindset of the SMB owner, Low added. "At the end of the day, it is up to the SMB bosses to decide if outsourcing of their IT services would work. But, they should also consider the many intangible benefits IT outsourcing can bring to an organization.

"Perhaps, another rule of Business 101 would be 'do what you know best'," he noted.

The ZDNet Asia SMB IT Priorities 2006/07 survey was conducted online between March and May 2006. The survey drew 134 respondents, of which 63 percent were from Singapore--across all industry sectors. The majority worked in companies with fewer than 100 employees.

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