Return of the Guru

Why Help Desk Outsourcing Is Not Worth It

Ara Trembly
Insurance Experts' Forum, October 13, 2011

Outsourcing various IT functions is a tricky bit of business at best, with emotions running high over the idea of putting people out of work in the name of saving money on the bottom line. Still, outsourcing of discrete operations just makes sense for certain areas of the enterprise.

According to a recent posting from Computer Economics, the help desk is a people-intensive operation—often comprising 8 percent or more of the typical IT staff—and can benefit from investments in systems that support repetitive processes, all of which make it a prime target for commoditization as a packaged service. The researcher was surprised to find, however, that the percentage of organizations outsourcing this function is relatively low and has been declining over the past few years.

The results of CE’s " IT Help Desk Outsourcing Trend and Customer Experience" show that only 19 percent of organizations practiced help desk outsourcing in 2007. While the number jumped to 25 percent in 2008, it has since dropped annually over the course of the recession, ending at 20 percent in 2011. “As companies laid off employees, some organizations eliminated outsourced IT help desk services altogether in favor of internal resources,” the researcher adds.

Why has this happened when the case for outsourcing helpdesks is so compelling? The answer is that the case really isn’t compelling at all. The prime reason to outsource internal helpdesk functions is that it allows enterprises to rid themselves of employee salaries and benefits while replacing their output with a less expensive packaged service from an outsourcer. This practice has fattened some companies' bottom lines, but the market figures show that the cost savings are not enough to make this particular form of outsourcing attractive for most.

So what do internal resources have that outsourced resources lack? The answer is intimate familiarity with the individual enterprise and the company as an entity. While a global view of IT helpdesk functions may show many repetitive processes, a closer view will almost certainly reveal that individual enterprises differ from each other in both substantial and insubstantial ways. Any of those differences, however, may be important in resolving problems from a helpdesk perspective.

It is not so difficult to go out into the marketplace and find an outsourcer who is familiar with the vendor applications you use, but finding someone who is familiar with how you use those applications and how you have customized them for your enterprise is much more of a needle-in-a-haystack scenario. In fact, it is very unlikely that you will be able to find such a talented individual or group, and if you do, you should consider bringing them in-house as employees. Further, if you have developed your own applications—as many insurers have—the outsider represents someone who will have to be trained, at your time and expense.

CE says its research shows that organizations outsourcing their IT help desk express “a high level of concern about the level of service received from outside service providers.” Given the unique nature of each enterprise, it is hardly surprising that insurers, in particular, would be worried about how well an outside firm could respond to the carrier’s helpdesk needs.

It’s much more likely that those who already possess inside knowledge of a company’s systems and policies will be able to solve a problem that may, indeed, involve both systems and policies. Thus, internal resources are much more effective in what most would certainly consider a critical operation in terms of keeping operations and output running smoothly.

It would be interesting to study how much efficiency is lost by calling in an outside resource with necessarily limited knowledge of one’s systems, but for the moment I would suggest relying on common sense and trusting your more knowledgeable on-site resources.

Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.

Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at ara@aratremblytechnology.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

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