How to Choose A Company for Managed IT Services

Transcription

1 How to Choose A Company for Managed IT Services By Richard Bruneau Table of Contents: Introduction.2 What is IT? 3 What Is Outsourcing? 5 What is Difference Between IT Staff Augmentation and IT Managed Services? 6 Summary of Outsourcing IT Through Managed Services 11 IT Outsourcing: The Risks.13 What is Workflow and Why Is it Important?..14 Office Equipment and Software to Make Managed IT More Effective Questions to Ask to or About Your Computer IT Specialists..21 Levels of Service..22 Conclusion.23

2 Introduction Many businesses today use some form of IT (information technology) support to assist them with technical issues and problems relating to their computers, networks and peripheral equipment. Sometimes IT support can be used profitably for the business, but sometimes it can be a costly mistake if done incorrectly. This short book examines the issue of how to not make mistakes when choosing or looking for IT support. The questions to ask about using IT personnel are the following: (1) Is outsourcing IT management a better option than in-house alternatives? (2) What criteria should be used in a choosing a managed IT provider? And, (3) How does a business choose a level of service(s) appropriate for their particular business? Outsourcing IT functions for most businesses makes better sense than most in-house options or even using temporary employees. Outsourcing proven to work can range anywhere from partial to full outsourcing which is usually detailed in a some sort of service level agreement (SLA). Outsourced managed IT offers a proactive approach, where uncertainties are minimized. Reactive IT management, especially insourced or inhouse, can usually be considered costly and inefficient for most businesses that have networks and a server, a larger number of employees, and numerous users who need access to a server. 3

3 What is IT? Information technology (IT) is the application of computers and telecommunications equipment to store, retrieve, transmit and manipulate data in a business or other enterprise. The word IT is commonly used as a synonym for computers and computer networks, but it also refers to other information distribution technologies such as telephones and television. IT also can refer to computer hardware, software, semiconductors, electronics, internet, telecom equipment, e-commerce and miscellaneous computer services. The Information Technology Association of America has defined information technology as "the study, design, development, application, implementation, support or management of computer-based information systems". The responsibilities of those working in the IT field include network administration and software development and installation. It often also includes the manner in which hardware and software is maintained, upgraded and/or replaced. And monitoring of a company s entire system on a regular basis is usually critical. Within an academic context, the Association for Computing Machinery defines IT as "undergraduate degree programs that prepare students to meet the computer technology needs of business, government, healthcare, schools, and other kinds of organizations. IT specialists assume responsibility for selecting hardware and software products appropriate for an organization, integrating such products with the organization s needs and infrastructure. These specialists then install, customize, and maintain those applications for the organization s computer end users." The value to a business of information technology lies in automating business processes, providing information for decision making, connecting businesses with their customers and other businesses, and providing productivity tools to increase efficiency. Approximately $3,737 billion is estimated to be spent worldwide on IT in 2013, which includes devices, data center systems, enterprise software, IT services, and telecom services. About $927 billion of that total is on IT services alone. IT management and problem-solving is normally a specialty requiring the knowledge and expertise of professionals and is not usually done well as a sideline. It is not typically a do-it-yourself issue for most businesses, unless what the business does and what it uses for technology are very simple. Selecting IT personnel to handle all of its complexities in a cost-effective way for a business is not an easy process. The IT personnel ideally should understand the needs of that particular industry or business very well, including what specialized equipment that business uses as well as any specialized computer and software. Law firms, for example, have various programs to manage their practice. Healthcare providers have software unique to its workflow needs (discussed later). An IT firm should specialize in the needs of industries and businesses it understands fairly well. There are also ethical issues that must be addressed by IT personnel that are of paramount importance to many organizations, such as the following: 4

4 Breaches of copyright by those downloading files stored without the permission of the copyright holders Employers monitoring their employees' s and other Internet usage Unsolicited s Hackers accessing online databases Web sites installing cookies or spyware to monitor a user's online activities Professional IT firms have usually covered most or all of the bases necessary to be effective in the markets they serve. Everything so far addressed is on their menu, as requirements of professionals. This cannot always be said of personnel hired to work internally to solve whatever problems may come up. Regardless of the education level and experience of the internal IT specialist, there are frequently issues and problems that are not handled properly without outside expertise. The professional services of IT firms usually fall into the category what we refer to as outsourcing. But they may also be classified as staff augmentation. We will explore the differences between the two. 5

5 What is Outsourcing? The benefits of outsourcing seem obvious, touted by experts across numerous industries as the answer to cutting costs for business functions ranging from information technology to accounting, marketing and human resources. It seems possible that you could run an entire company without ever hiring a single employee. But is there more to outsourcing than the bottom line? What are the other reasons companies choose this route? Wikipedia defines outsourcing the following way: In business, outsourcing is the contracting out of a business process to a thirdparty. The term "outsourcing" became popular in the United States near the turn of the 21st century. Outsourcing sometimes involves transferring employees and assets from one firm to another, but not always. Outsourcing is also used to describe the practice of handing over control of public services to for-profit corporations. Outsourcing includes both foreign and domestic contracting, and sometimes includes offshoring or relocating a business function to another country. Financial savings from lower international labor rates is a big motivation for outsourcing/offshoring. The opposite of outsourcing is called insourcing, which entails bringing processes handled by third-party firms in-house, and is sometimes accomplished via vertical integration. However, a business can provide a contract service to another business without necessarily insourcing that business process. Among the reasons companies elect to outsource include the avoidance of regulations, high taxes, high energy costs, and costs associated with defined benefits in labor-union contracts and taxes for government-mandated benefits. Perceived or actual gross margin in the short run incentivizes a company to outsource. With reduced short-run costs, executive management sees the opportunity for short-run profits, while the income growth of the consumer base is strained. This motivates companies to outsource for lower labor costs. However, the company may or may not incur unexpected costs to train these overseas workers. Lower regulatory costs are an addition to companies saving money when outsourcing. On comparative costs, a U.S. employer typically incurs higher defined benefit costs associated with taxes to account for social security, Medicare, safety protection (OSHA regulations) and FICA taxes etc. than in other countries. Read the full article: 6

6 What Is the Difference between IT Staff Augmentation and IT Managed Services (Outsourcing)? Staff augmentation is using temporary workers to fill short-term positions. IT staff augmentation could be thought of as a subsection of outsourcing, but there is a difference between full-blown outsourcing and staff augmentation. Employing temporary workers allows companies to avoid the hiring process and additional payroll duties. Outsourcing lets companies take advantage of a subcontractor set up to perform certain tasks or activities. Staff augmentation leans more toward the idea of utilizing statutory or temporary employees than independent contractors who are completely in business for themselves. Companies may decide to use a staff augmentation plan to avoid expanding their current operations. If it chooses to hire more employees, the company will incur costs for the floor space needed for these individuals to work and complete projects, as well as their salaries and benefits. Large organizations may outsource or use staff augmentation that involves foreign countries, where labor is often cheaper than in the United States. Foreign labor markets often have experienced workers available and favorable laws for completing projects. With respect to IT, this explains why you often reach tech support people in countries such as India and the Philippines when you dial toll-free numbers for help. The duty has been outsourced. It is a constant struggle for many companies to retain and train application experts and find required skills when and where they are needed. While some organizations are comfortable having a third-party manage part or all of their application environment, many seek to augment their in-house skills with external IT talent who can work under their direction, control and guidance. Many IT organizations today seek out both the flexibility to obtain resources when and where needed and the ability to gear up for projects that require specialized application skills that don t exist or can t be obtained internally. Staff augmentation can help a business achieve a number of business goals including faster speed-to-market, find industry and technical experience that accelerates the quality and speed of development, and avoid the cost and time required for internal training and skill development. Staff Augmentation services provides skilled personnel to work under your direction to help you develop, maintain, manage and support your applications. Skilled application professionals can help you manage fluctuating skill needs, skills gaps and changing staffing needs to meet your aggressive project timetables. They can work with you on-site or remotely, and should be certified in key technologies. Under a staff augmentation scenario, the cost of hiring for temporary needs and disengaging once those needs have been met can more than offset the higher cost of continuing to pay for more permanent resources. Also, staff augmentation requires minimal contracting effort, has a simple cost model (rate times hours worked), can scale up or down quickly, and has minimal impact on the existing state of an IT organization. 7

7 Staff augmentation, however, can become a problem when it evolves into a permanent operating structure. As a long-term solution, it has none of the benefits of alternative longterm external sourcing solutions, such as managed services (outsourcing). In fact, staff augmentation can create a number of serious risks if considered a long-term solution. By its nature, staff augmentation represents higher labor costs. But reliance on staff augmentation as a permanent model tends to foster a management style that does not plan for resource consumption. Resources become too easily accessed. The consequence of this could be gradual staff creep and an unrecognized head count that slips under the organization s notice. Benefits of Staff Augmentation Benefits as a temporary solution Rapid access to missing capabilities and skills Accommodate staff shortages due to unexpected events Avoidance of hiring / de-hiring costs Costs scalable to demand No impact on operating model Easily contracted Cost model transparent Issues as a permanent mode of operation No service level commitment Higher cost Fosters a management style that does not plan All issues attributed to insufficient staffing Increase overhead managing individual subcontractors Knowledge vested in the individual (as with internal staff, but less control) Because staff augmentation has no associated service level commitments other than hours available to work, the value derived is frequently unclear and hard to measure. Perhaps most significant is the loss of knowledge control. As contractors become embedded in the organization, they accumulate information and capabilities upon which the organization is functionally dependent. With no contracted service commitment or requirement to document their knowledge in a transferrable manner, contractors can and do often hold organizations hostage, perpetuating the permanency of their engagement. Advantages of managed services (outsourcing) If an organization is involved in a staff augmentation committment, transitioning to a managed services (outsourcing) situation can yield all of the benefits of flexibility and skill access it needs, while overcoming the major disadvantages associated with staff augmentation. The managed services (outsourcing) model differs from staff augmentation in a number of ways. The essential difference between the two is that under a managed services model (outsourcing), the provider is committed to delivering an outcome at a pre-defined 8

8 price versus an input as under the staff augmentation model. An input is simply the performance of an activity with no commitment that the activity will result in the desired outcome. Comparing Staff Augmentation (out-tasking) vs. Managed Services (outsourcing) Managed Services (Outsourcing) IT supplier assumes control of all or part of the service delivery commitments expressed as service levels More definite and committed scope and term Pricing more frequently tied to service levels and volumes Supplier assumes control of all or part of the execution component of IT Commitments expressed as service levels Committed scope and term Knowledge must be documented and transferrable Supplier assumes the risk of transition and operations Limited commitment Supplier commits to providing resources of defined capability at a price Pricing tied to hours worked and availability Customer manages the delivery model Knowledge vested in the individual All delivery risk remains with client Staff Augmentation (Out-tasking) Commitment to deliver an outcome only Commitment to provide an input based on planning, as the organization must define the requirement on a service and performance criteria basis. Pricing is tied to the outcome. Should the service requirement diminish or disappear, the associated costs react in kind. This provides the scalability to demand often sought in a staff augmentation model, but scalability that is tied to service. Under staff augmentation, the only service commitment is hours of work. Under managed services (outsourcing), the provider assumes all of the risk of meeting the service commitment. Managed services organizations generally serve multiple clients from multiple locations. As opposed to smaller staff augmentation organizations (or individual contractors), managed services organizations have the capability of delivering a wealth of skills and capabilities. Client organizations have access to a broad base of skills, solutions and knowledge to meet evolving requirements. A managed services (outsourcing) firm delivers all of the skills access and flexibility staff augmentation, but because managed services relies heavily on management and process rigor, clients generally experience an elevated capability themselves. Inhibitors to transferring to a managed services (outsourcing) With all of the benefits of managed services (outsourcing), why do organizations retain longterm staff augmentation? 9

9 Pricing in managed services is harder to explain and understand compared to staff augmentation in which pricing is little more than a rate card (because the commitment is no more than availability to work on an hour by hour basis). The staff augmentation scenario therefore appeals to departments that want to get it done that can issue requests for rate cards to multiple vendors and select accordingly. This bypasses the value element of service commitment entirely, but it is simple. Pricing for managed services requires that the parties agree on defined outcomes and the pricing is tied to those outcomes. A system can easily be put in place to ensure that the value is retained over time. The process is more complex, but the defining of outcomes expected substantially justifies the effort. The managed services (outsourcing) model requires a partnering mentality. Managed services providers have as the core of their business philosophy service delivery excellence and they invest heavily in achieving and nurturing that capability. By partnering with a quality managed services provider, organizations allow IT leadership to focus on how to utilize technology to add value to their particular organizations. Inhibitors that prevent companies from moving to a Managed Services (outsourcing) alternative A built-in bias towards staff augmentation Heightened perception of control and staff management Simpler pricing model Perception of being more cost effective Easily contracted within IT organization Partnership not an issue Permits IT organization to focus on requirements not execution Enhanced control through service levels and reporting metrics Transforming the Model (Addressing the Inhibitors) under contract. The primary hurdle is the perception that transferring day-to-day operational responsibility is giving up control when, in fact, control is always retained through relationship and contractual commitments. For IT departments that have become dependent on the staff augmentation model, transforming these arrangements into a managed services (outsourcing) model can create significant economic and service value. The managed services (outsourcing) model is focused on providing outcomes (service levels and specific services linked to a volume of activity) for a pre-determined price versus inputs at a cost. This provides price/cost predictability for the client, while shifting the delivery risk to the provider. The costs of meeting service level commitments can exceed price if poorly estimated or managed, so the outsourcing provider is highly motivated to implement productivity tools and operational hygienic tools and processes that promote the maintenance and preservation of operational health, both of which ultimately deliver added value to the customer business needs The long-term nature of managed services (outsourcing) models means the provider is better able to plan, manage resources, and balance workload. The result is a lower cost of 10

10 delivery for a specific level of service. In general, a service provider under a managed services (outsourcing) model can deliver service at substantially lower cost than the cost of similar services delivered under a staff augmentation arrangement. By creating a clear picture of service, business need, and cost, outsourcing tends to shift the focus from rate cards and resource utilization to effective problem solving. Once this partnered vision is established, we frequently see clients requesting service levels lower than what has been previously delivered and reducing their IT spending accordingly. In a managed services scenario, value is linked to the ability to move work to the best resource/best location, which requires that the provider document its knowledge. Since this documentation contractually belongs to the client, the risk of knowledge loss is minimized for IT departments. Because pricing is fixed the managed services provider has an incentive to help the client resolve in advance key issues that impact performance, such as unnecessary complexity and a lack of adherence to standards. Conclusion Staff augmentation has its place in an IT department s arsenal. Even with managed services (outsourcing), staff augmentation is often utilized for selected services at specific points in time. However, when staff augmentation becomes the most expected operating model for an IT organization, it constitutes an ineffective form of outsourcing that involves high cost, low commitment and high risk. IT departments utilizing staff augmentation should recognize that they are already sourcing externally and should seek to adopt instead a true managed services (outsourcing) model to maximize value. 11

11 Summary of Outsourcing IT Through Managed Services Keeps You Focused on Your Core Business. Every business has limited resources, and managers have limited time and attention. Outsourcing helps you not get distracted by complex IT issues. It is neither practical, nor possible to be a jack of all trades. Outsourcing lets you focus on your core competencies while another company focuses on theirs. Resources are not available internally. On the flip side, maybe you don't have anyone in your company who can manage your IT needs, and hiring a new employee is not in the budget. Outsourcing can be a feasible alternative, both for the interim and for the long-term. Control IT Costs. With outsourcing of IT, you only pay for what you use when you need it. Reduce Operating and Labor Costs. Hiring and training an internal or in-house IT person can be very expensive. And temporary employees can disappoint you by not living up to your expectations. Outsourcing, on the other hand, allows you to focus your human resources where they are most needed. When you outsource, you eliminate the costs associated with hiring an employee, such as management oversight, training, health insurance, employment taxes, retirement plans etc. IT Companies are Experienced as Well as Qualified. IT service companies see related problems multiple times. But an in-house IT person, although trained and qualified, may be dealing with an isolated experience for the first time and not have enough experience to effectively deal with it. Since it's their core competency, outsourced IT vendors look to hire staff with specific qualifications and certifications. You may not know what to look for if you're hiring someone to be on staff full-time, so you may hire the wrong person for the job. Gain access to exceptional capabilities. Your return on investment is so much greater when you outsource information technology to a firm that specializes in the areas you need. Instead of just the knowledge of one person, you benefit from the collective experience of a team of IT professionals. Outsourced IT companies usually require their IT staff to have proper industry training and certifications as well. Free internal resources for other purposes. You may have someone in your office that is pretty good with computers or accounting, but most likely these were not the jobs he or she was hired to do. If they are spending time taking care of these things, who is doing what they were hired to do? Outsourcing allows you to retain employees for their highest and best use, rather than wasting their time on things that may take them longer than someone who is trained in these specific areas. Increase Competitiveness and Efficiency. Companies that try to do all IT Services themselves in-house frequently have much higher research, development, and implementation time. These all are costly, and the costs are then passed on to the consumers. New Technology Can Be Implemented Quickly. A high quality outsourced IT company has the resources to start new projects immediately. Undertaking the same project in-house could involve weeks or months to hire the right people, provide them with the support they need, and train them. Experienced IT companies will bring years of experience right at the beginning, automatically saving time and money. 12

12 Outsourced IT Companies Can Level the Playing Field. Larger companies may be able to afford and absorb the cost of an in-house IT team, but a smaller company may not be able to match what the big companies have. Outsourcing can give small companies access to the same technology and expertise larger companies have at a more affordable cost, using economy of scale. Reduce Risk. Outsourcing companies can assume and manage risk, especially when they have specific industry knowledge. They will be on top of security and compliance issues, as well as what the competition is doing, financial conditions in the economy, and technology changes. Keeping up with technology required to run your business is expensive and time consuming. Because professional outsourced IT providers work with multiple clients and need to keep up on industry best practices, they typically know what is right and what is not. This kind of knowledge and experience dramatically reduces your risk of implementing a costly wrong decision. Maximize restructuring benefits. When you are restructuring your company to improve costs, quality, service, or speed, your non-core business functions may get pushed aside. They still need to be handled, however, and outsourcing is an optimal way to do this. Don't sabotage your restructuring efforts by failing to keep up with non-core needs. Function difficult to manage or out of control. This is definitely a scenario when outsourcing to experts can make a big difference. But don't make the mistake of thinking you can forget about the problem now that it's being "handled." You still need to be involved even after control is regained. Make capital funds available. By outsourcing non-core business functions, you can spend your capital funds on items that are directly related to your product or your customers. Access to the latest and greatest in technology. You may have noticed how rapidly software and hardware becomes obsolete in this industry. How is one staff person going to keep up-todate with everything? Outsourcing gives you the benefit of having more than just one IT professional. And since it's the core competency of the company, they can give you sound advice to put your IT dollars to work for you. Flexibility. Vendors have multiple resources available to them, while internal staff may have limited resources and capabilities. Job security and burnout reduction for regular employees. Using an outsourced IT company removes the burden from your staff who has taken on more than he or she was hired for because "someone needs to do it." You will establish a better relationship with your employees when you let them do what they do best and what they were hired to do. 13

13 IT Outsourcing: The Risks Anytime you give someone else responsibility for any aspect of your business, whether a fulltime new hire or an outside vendor, there is risk involved. There will always be the question did I hire the right person/company to do the job? Will they do what they are supposed to do? How will they "fit" with my employees or departments? Business owners who consider outsourcing IT functions need to be aware of the following risks: Some IT functions are not easily outsourced. IT affects an entire organization, from the simple tasks employees do every day to the complex automated aspects. Be sure the outside vendor are qualified to take care of your greatest needs. Control may be lost. Critics argue that an outside vendor will never be as effective as a fulltime employee who is under the same management as other employees. However, a supervisor that is knowledgeable in managing an IT staff member will usually be sufficient. Employee morale could be affected. This is particularly true if you will be laying off employees to replace their job functions with an outsourced firm. Then other employees may wonder if their job is at risk, too. You may get "locked in." If the vendor does not document their work on your network and system, or if you've had to purchase their proprietary software, you may feel like you can't go anywhere else or take back your network. Many outsourced companies require you to sign a year to year contract which limits flexibility. Most of these risks can be avoided altogether if you know what to look for in a vendor and ask the right questions. These questions will get you thinking about what to ask and what to look for, whether you want to hire a full-time IT professional on staff, or outsource to a support provider. There are many rewards you can expect when you outsource your company's IT functions as well: Conclusion: Whether you choose to outsource or hire internally, one thing is certain, you must know how to manage successful working relationships with your IT service providers. They're not always the easiest people in the world to understand and deal with, but here are some tips: Clearly form and communicate the goals and objectives. Have a strategic vision and plan. Select the right vendor through research and references. Insist on a contract or plan that includes all the expectations of the relationship, especially the financial aspect. Maintain open communication with all affected individuals and groups. Rally support and involvement from decision makers involved. 14

14 What is Workflow and Why Is it Important? The definition of productivity as it relates to business success is changing rapidly. Productivity is no longer defined simply as creating more with less. Increasingly, value is linked not only to sheer output but to innovation, or the ability to correctly anticipate and creatively respond to new and changing market opportunities. Today, a strong competitive advantage is enjoyed by those companies with the flexible business infrastructures and tools in place to quickly develop new products and services and continuously outperform the time to market of their competitors. Information technology (IT) holds the keys to this flexibility. IT make tools for innovation readily available to implement quickly. According to famed management consultant Peter Drucker: Innovation is the design and development of something new, as yet unknown and not in existence, which will establish a new economic configuration out of the old, known, existing elements. It will give these elements an entirely new economic dimension. It is the missing link between having a number of disconnected elements, each marginally effective, and an integrated system of great power. It is this systems aspect of innovation that is invoked when we say that men like Siemens or Edison created a new industry. All the elements were there, except one. Adding this one new element created an entirely new economic capacity. Peter F. Drucker, Managing for Results, 1964, 1986, p. 147 The concept of workflow is critical in the process of innovation. The two are intricately and intimately tied. When workflow is inhibited, innovation is delayed, impaired or even prevented altogether. Workflow, loosely defined, is the set of tasks grouped chronologically into processes and the set of people or resources needed for those tasks, that are necessary to accomplish a given goal. An organization s workflow is comprised of the set of processes it needs to accomplish, the set of people or other resources available to perform those processes, and the interactions among them. Workflow can be described simply as the movement of documents and tasks through a business process. Workflow can be a sequential progression of work activities or a complex set of processes each taking place concurrently, eventually impacting each other according to a set of rules, routes, and roles. The dependence of today's business enterprises on innovation and fast delivery of product cannot be overestimated. With the new emphasis on relentless innovation and the advantages that it breeds, successful companies are constantly searching for ways to reshape their corporate structures and streamline their business processes. Workflow Management: Streamlining Business Goods and services must be produced both faster and smarter through teamwork and efficiency. Only those companies with innovative staff, products, services, and short development cycles will prosper. 15

15 Workflow management, a strategy for automating business processes, is a powerful tool for translating the collaborative vision into real-world business applications with clear and measurable paybacks. The aim of workflow management is to streamline the components of various office systems by eliminating unnecessary tasks (and the costs associated with the performance of those tasks) and automating the remaining tasks in a process. Workflow management is the effective application of information technologies to internal business processes in order to accelerate the collaborative and creative processes that drive innovation. The goal of workflow software technology is the creation of a single environment for managing the complexities multiple-office automation environments. As software has moved from individualized solutions with dedicated functionality to integrated groupware solutions, workflow has evolved as a metaphor for the efficient coordination of multiple workgroups using multiple technologies. Most workflow products support two basic functions: Tools for mapping business processes, defined sets of routes, roles, and rules for the movement of documents and tasks. Implementation of those business processes through linkages with a company's computer network, shared databases, and systems, so that information can flow through the organization at a controlled and efficient pace. Key benefits of workflow management include: Improved efficiency through the elimination of many unnecessary task steps. Better business process control achieved by standardizing work methods and creating audit trails. Improved customer service from trackable processes and responses. Flexibility created from software control over processes, which enables future redesign in response to changing needs. Workflow Enhancement Scenario Conventional workflow. Enhanced workflow Conventional Workflow Information critical to a workflow process can be defined and stored in databases, enabling a computer system to automate the flow of information and tasks. Automation minimizes reliance on physical meetings to enter redundant data and to physically exchange paper. For example, using an automated workflow process, purchase orders and work orders can be processed to completion without a single printout. The defined workflow information might include order activity rules, workflow steps, and expenditure authorization requests, all of which can be routed automatically using . The following scenario demonstrates savings in labor and time that can be achieved when workflow technology is applied to a typical business. 16

16 Typical Paper Trail Process The department supervisor at a remote office fills out a requisition form to request goods. The administrative assistant processes the requisition form, looks through two catalogs, and locates the items. The assistant then fills out the paper portion of the requisition and walks it to the department director. The department director reviews the requisition, signs it, and puts it in an Out basket. The administrative assistant retrieves the requisition and places it in a courier pack to the central office. A courier drives to the remote office, picks up the courier pack, and delivers it to the purchasing clerk at the central office. The purchasing clerk reviews the requisition, audits central stores, and sends the requisition to the purchasing manager if the item is in stock, or to the buyer if the item is not in stock. The buyer reviews the document, selects the supplier, calls for a quote, and passes the requisition to the purchasing manager. The purchasing manager reviews, signs, and places the requisition in an Out basket. The purchasing clerk retrieves the requisition and passes it to the encumbrance clerk. The encumbrance clerk reviews the items, assigns account codes, and checks the budget. If funds are available, the requisition is passed back to the purchasing clerk. The purchasing clerk sends the requisition to the comptroller if the item is in central stores, or to the buyer if it is not in stock and must be bought and delivered to central stores. The clerk retrieves the purchase order and delivers it to the comptroller or buyer. The buyer consolidates the requisition into a single purchase order per vendor and places the order in the Out basket for delivery to the comptroller. The comptroller reviews and signs the purchase order. At this step, the routing can take longer, based on the amount of the request and the level of authorization of the person approving the purchase. The clerk retrieves the document and places it in interoffice mail. Another day passes. Using interoffice mail, a multipart document arrives one day later in the purchasing department. The purchasing clerk tears out the white copy and sends the rest of the multipart form to central stores.the purchasing clerk logs and files the white copy. The central stores clerk retrieves the item from the shelf, tears out the pink copy, places it in the accounts payable stack, and ships the item and the remaining copies to the remote office. The administrative assistant receives the item, tears out, logs, and files the blue copies, and places the green receiving and yellow accounts payable copy in a courier pack to go back to the central office. A courier retrieves the pack and returns the green and yellow copies to the central office. The purchasing clerk attaches the white original and green receiving copies to each other, puts them in the file, and sends the yellow copy to accounts payable. The accounts payable clerk receives the invoice from central stores, retrieves the open yellow receiver copy from the file, and matches and enters the voucher. Total time (in minutes) per item if the item is not in stock: Total time (in minutes) per item if the item is in stock:

17 Enhanced Workflow The following shows how workflow enhancement software can improve a conventional workflow by reducing the paper trail, minimizing redundant data and data entry, and reducing errors or the need to redo work. Workflow Enhancements Using enchanced workflow, an organization can streamline its workflow process as described below: 1. The department supervisor fills out a requisition form to request goods. 2. The administrative assistant processes the requisition form online. The system checks the budget and automatically routes the request to the next approver based on the software workflow table hierarchy and the amount of the item. 3. The department director reviews and approves the requisition online. The system automatically routes the requisition to the appropriate buyer or purchasing manager. 4. The purchasing manager consolidates the requisition with others for the same vendor into a purchase order. The system automatically routes the purchase order to the next approver. 5. The comptroller reviews and approves the purchase order as required. 6. The purchase order is automatically routed to central stores. A clerk takes the pick slip, retrieves the item from the shelf, and ships it for next-day delivery. 7. The administrative assistant receives the item on the next day. 8. The accounts payable clerk receives the invoice online and matches it to the open receipt that is also online. The system automatically creates a voucher. There are many such scenarios possible or illustrations that can be created. Workflow improvement is critical to many businesses today. This is especially true in hospitals, where human lives are at stake. Any slowdown in workflow could mean someone is healed sooner rather than later, or someone dies because procedures were not implemented soon enough. According to Connexall: Patient care in hospitals calls for tight coupling of work processes across teams. There is a need for high levels of interdependence between many care team members - often with different backgrounds, departments and disciplines. Connexall's healthcare workflow solution provides stability when the environment is uncertain. In most cases of patient flow and throughput, work is carried out in isolation, not through true collaboration (i.e. sharing knowledge and resources across all team members). The reality is that it is hard to have working relationships across functional teams. Shared knowledge is good but not sufficient. There is a need for an interdependent environment, especially for task management. In hospitals today, it is inefficient for care teams to be unable to function or be collaborative across an entire care path. The path starts in admissions and goes to the floor, supported by numerous people, departments and tasks. ( 18

18 Workflow enhancement even in basic businesses is difficult to achieve without the right choice of IT support. This means there needs to be equipment in place, such as multifunction printers, that are integrated with software engineered to improve workflow in that particular industry or business. Wrong choice of IT support could mean the equipment and software a company uses are not properly integrated or not integrated at all. 19

19 Office Equipment and Software to Make IT Management More Effective The models and scenarios discussed so far, such as workflow and efficient choice of managed IT services require an additional dimension for analysis: choice of office equipment. Keeping or choosing the wrong office equipment, particularly scanners, fax machines, copiers, multi-function machines, etc., can inhibit even the best of arrangements with respect to IT outsourcing and efforts to improve workflow. Lexmark, for example, designs software for many of its multi-function machines with solutions to problems in mind, rather than just optimal functionality. One such system called Clinical Assistant is designed to solve problems related to the healthcare industry. According to one of their brochures: The Lexmark Clinical Assistant is a software bundle for Lexmark multifunction printers (MSPs) customized specifically for the healthcare industry. Clinical Assistant applications are designed to address common workflow challenges in clinical environments to help increase staff productivity and reduce errors. Clinical Assistant is a suite of powerful document applications that are bundled in one unique offering to help streamline work processes and improve patient care. In addition to copy, fax and scan-to- functions, the suite includes four timesaving document management and workflow applications. These convenient options are easily accessed through icons on the Lexmark MFP s user-friendly touch screen, allowing clinical staff to complete complicated and critical workflow processes with a single touch and without special training. If you are a healthcare provider, the company you use to outsource IT services should understand and even offer these software packages and machines (or the equivalent). Xerox Corporation s Extensible Interface Platform allows workflow problems to be solved by choosing the right MFP (multi-function printer) and customized software. As they say in one of their brochures: There s a difference when you combine your EIP-enabled multifunction system with EIP-enabled software. With our Xerox Business Innovation Partners, we can improve the way businesses run, whether it s a hospital, a school system, a law office, a multinational company or a small business. EIP is a software platform inside many Xerox MFPs that allows independent software vendors and developers to easily create personalized and customized document management solutions that you can access right from the MFP touch screen. These solutions can leverage your existing infrastructure and databases. To experience the power of EIP, you ll need a multifunction system and software that are EIP-enabled. By itself, EIP is not a product. You can take advantage of applications from industry-leading software providers, or, since EIP is based on web standards, it s easy for anyone with development capabilities to create custom solutions. 20

20 So the bottom line here is to do business with an IT firm that also sells and services equipment that does what you want, such as the MFPs and applications just described. Workflow can be personalized with the right choices of systems. A company that sells, understands and services these solutions should be under the same roof as your IT team. If they are not, you might have two teams that only know how to walk over each other rather than collaborate on solutions. 21

21 Questions to Ask to or About Your Computer IT Specialists Is anyone on the team Microsoft Certified? Yes No Do their IT Professionals receive weekly training, monthly, etc? Yes No Do they respond to your emergency computer issues within 4 hours or less? Yes No Are they available in a timely manner when you need them for non-emergency functions? Yes No Is there a person in their office dedicated to taking your calls and arranging proper service for you? Yes No Do they have more than one IT professional who is fully trained? Yes No Do they offer a prescheduled maintenance program? Yes No Do they use a maintenance checklist that you can review? Yes No Do they have a Helpdesk system that allows you to add issues to and track their progress? Yes No Do they provide you with detailed documentation you can use to measure their service after each visit? Yes No Does it ever feel like they are learning their trade on your time? Yes No Do they talk about your network in a way that is completely understandable to you? Yes No Are they always friendly and courteous to your employees? Yes No Do they arrive on time, every time? Yes No Do they have customer service policies in writing to ensure your guaranteed satisfaction? Yes No Do they provide proactive advice to help you achieve your business goals or are they mostly "break-fix?" Proactive Advice Mostly "Break-Fix" Do they have management oversight, are they accountable to anyone, or do they just do what they feel like doing? Yes No 22

22 What happens when your IT support person is sick or goes on vacation? We wait for them to get back They have multiple IT Professionals to take their place How is your critical network and support info stored? In online database On paper and in binders None at all Not told Do they provide you with an outlined or comprehensive plan including a budget based on your business goals? Yes No When they come to your office do they check in and check out with you to review what needs to be done and what has been completed? Yes No How would you rank their follow-up skills? Excellent Good Average Poor Terrible If you answered more than 70% of these questions negatively, it s likely time to choose a new IT provider. Levels of Service Your Managed IT firm should offer levels of service based on your needs and budget. You should be able to select and omit whatever suits you or does not. Many firms sell these packages with terms such as silver, bronze, gold, etc. This is a marketing ploy to give packages a name, but it makes sense nonetheless. Smaller businesses have different needs than larger businesses, especially where their networks and number of users is small. You can always upgrade your level of service as your business grows. 23

23 Conclusion You should do business with an IT firm that also sells and services equipment that does what you want, such as the MFPs and applications you need to improve workflow. Workflow can be personalized with the right choices of systems. A company that sells, understands and services these solutions should be under the same roof as your IT team. If they are not, you might have two or more teams that only know how to walk over each other rather than collaborate on solutions. Your IT team should be just that a team. Reliance on a single person can be dangerous to your business. The team should be professional and qualified, and they should know how to handle your particular business or industry from experience. 24