Cost-Success Rate High for Firms that Outsource Network Operations

August, 2016

Organizations that outsource network operations have a very positive cost-saving experience, but their experience is mixed otherwise. About 72% of IT organizations in the U.S. and Canada that outsource network operations say their costs are the same as or lower than when performing the same function in-house.

That’s one of the findings of our full study, Network Operations Outsourcing Trends and Customer Experience. But there is room for improvement in the services delivered by network outsourcing providers, our study shows. Furthermore, there has been a drop in the number of organizations that utilize network outsourcing.

As seen in Figure 5 from the full study, 33% of survey respondents say that their cost is less than what would be the case if they performed the function in-house, and 39% report the cost as being about the same.

ITOut fig 5 - Cost-Success Rate High for Firms that Outsource Network Operations

The cost-success rate is one of the key findings in our major outsourcing study, IT Outsourcing Statistics, which shows that outsourcers of network operations had the third-most positive cost-success rate when compared to other outsourced technologies, behind only data center operations and desktop support. In this study, we profile the outsourcing of 10 IT functions in order to inform and support outsourcing decisions by IT executives. The study also is a valuable source for service providers in understanding current market trends.

“Our data shows that outsourcing network operations can help organizations save a significant amount of money,” said Tom Dunlap, director of research for Computer Economics, Irvine, Calif. “But at the same time, we heard a lot of concerns about the quality of service provided by network outsourcing providers. We think if organizations are careful, however, they can realize success across the board. The study offers advice to improve service success, ROI, and total cost of ownership.”

To help IT executives understand their options, the full study examines adoption trends in the outsourcing of network operations. We report on the percentage of organizations outsourcing network operations (frequency), the average amount of work outsourced (level), and the change in the amount of work being outsourced (trend and volatility). We also present the cost- and service-success ratings, which provide insight into the potential risks and rewards IT organizations take in turning to outside service providers. We show how these trends differ by organization size and sector and provide recommendations for engaging with network operations outsourcing service providers.

This Research Byte is a brief overview of our report on this subject, Network Operations Outsourcing Trends and Customer Experience. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).