Gain from outsourcing voice, data networks

A third party service provider can provide organizations with higher levels of network service and economies of scale, IDC says.

SINGAPORE--Despite the misgivings about outsourcing, handing over the management of converged voice and data networks to a third party is the "most obvious choice" due to its benefits, says consulting firm IDC.

In IDC's managed and IT services survey conducted earlier this year of 1,500 respondents from the Asia-Pacific region, excluding Japan, 33 percent pointed to vendors' lack of flexibility in delivery as a key problem faced when outsourcing.

The next oft-encountered problem was vendors' lack of understanding of the customers' solutions needs, according to 31 percent of respondents. Another 30 percent complained about the vendors' inability to scale their offerings.

However, there are still many reasons to consider outsourcing. For example when there is a lack of in-house skills, noted Adrian Ho, research manager, managed services and enterprise networks, IDC Asia-Pacific, during a managed services conference held here earlier this month.

This, Ho added, is a common problem for organizations when it comes to converged voice and data networks.

According to the IDC survey, about 40 percent of the respondents polled cited the lack of in-house skills as the No.1 reason for engaging a third party in managing IT services. Another 31 percent cited lower capital expenditures, while 30 percent look for improved security features.

Ho noted that organizations, which decide not to outsource their voice and data networks to a managed services provide, may itself face problems like patchy levels of services, higher costs, increasing system complexity, and risk having a less adaptable IT infrastructure.

"Managed communications services offer a complete and flexible solution for data and voice network needs," Ho said.

The benefits include better network performance as vendors adhere to service level agreements (SLAs), and achieving economies of scale and better resource allocation.

With a managed service provider, organizations can also look to reducing system complexity due to centralized management, and having an IT infrastructure that is more responsive to market changes, He added.

According to IDC, the Asia-Pacific region, excluding Japan, was worth US$15.3 billion in 2005. Telecoms operators such as AT&T, PCCW, SingTel, and Telstra dominated the the market with about 64 percent market share collectively, followed by IT services providers such as Accenture, Datacraft, Hewlett-Packard, IBM, and Sun Microsystems with 26 percent share.

Network equipment providers such as Alcatel, Cisco Systems, and Lucent Technologies held about 6.7 percent share of the market.