I recently spoke with the COO of Lore Systems, Laurie Freeman.
[Disclosure: Lore is a sponsor of this blog]
– The Savings Potential of Outsourcing Your IT –
According to Laurie, the largest line item (and hence biggest cost suck) in a budget is normally staffing costs. This is particularly evident in the technology and startups space where leading venture firms like Sequoia are forcing portfolio companies make large staffing reductions as a first line of defense.
Lore has found that SMB’s typically staff an average of 2-4 full-time IT folks, often at an annual cost of ~$500k. What’s more, many IT employees are often underutilized to the tune of 50-60% or even lower. Such underutilization of IT staff can be related to available infrastructure, the staff not being fully competent or trained-up on requirements (often IT staff have been moved to IT from other areas), or resulting from a lack of understanding and communication between non-tech savvy management and IT.
In any of these cases, Lore can make a large and immediate impact to a client’s bottom line by simply raising the utilization rate to 100%, and relying on Lore expert staff to perform the work of 2-4 non-expert and salaried staff at a fraction of the cost.
A typical scenario for Lore is to begin working with a client in the process of removing 2-3 of its full-time IT staff. In most cases Lore assumes 40-60 hours per week of managed services (remember that staff utilization rates will go from 50% under internal management, to 100% with Lore). The on boarding process is seamless and typically the number of hours assumed at the beginning by Lore, goes down (not up) as Lore helps set up automated internal systems and processes. Companies are typically shocked by the difference in efficiency, cost savings and professionalism they get by working with Lore.
More frequently Lore is also performing individual audits and IT assessments, helping potential clients identify and quantify the value of a shift from in-house to outsourced staff. Because Lore’s domain expertise and vast experience, they are able to quickly make assessments and identify inefficiencies in current systems and processes.
Sometimes simply ‘knowing’ is half the battle. Laurie described one client who’s IT staff simply was not aware of the latest technologies available. Lore was able to come in and completely overhaul the IT network infrastructure using VM Ware virtualization tools.
As always, if your company is considering an outsourced IT provider, Lore would love to talk with you.
Laurie can be reached by email at: lfreeman@lore.net
Lore is also looking to hire talented engineers and sales persons. For more information on opportunities please visit Lore’s website.