Network Operations Outsourcing Gets Positive Rating for Service

October, 2012

IT organizations in North America report good customer experience with the outsourcing of network operations when it comes to cost and service, yet this IT function remains one of the least outsourced of the major IT functions.

These are among the findings of our study, Network Operations Outsourcing Trends and Customer Experience, which examines outsourcing of this function using six metrics: frequency, level, trend, volatility, cost experience, and service experience.

From the outsourcing profile in Figure 1, we see that the percentage of organizations that outsource network operations is low when compared to the outsourcing frequency of 11 other IT functions. However, the level is high. Those organizations that outsource network operations outsource a relatively high percentage of the work, the study finds.

Network Outsourcing Fig1 - Network Operations Outsourcing Gets Positive Rating for Service

Figure 1 also shows that the net growth trend and volatility of network operations outsourcing are both low. Together, these metrics show that the outlook for network operations outsourcing calls for relative stability and slow growth.

The net growth trend is the percentage of organizations increasing the amount of work they outsource over the previous year minus the percentage decreasing the amount of work outsourced. The volatility is a measure of how many organizations are changing the amount of work outsourced, either up or down.

Finally, the study rates the “cost success” of network operations outsourcing as being on the high side of moderate and the service success as being squarely in the high range. The customer experience is good. The percentage of organizations that find cost is lower or about the same as operating their own networks is on par with the cost experience of other outsourced functions. The percentage that find service levels the same as or better than performing the work in-house is relatively high. Customer dissatisfaction is not the cause of the low frequency and net growth trend.

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 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).