How to Choose A Company for Managed IT Services

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…………………..…………..19
Questions to Ask to or About Your Computer IT Specialists………………………………………..21
Levels of Service……………………………………………………………………………………………..22
Conclusion…………………………………………………………………………………………………….23
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.
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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:
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Breaches of copyright by those downloading files stored without the permission of the
copyright holders
Employers monitoring their employees' emails and other Internet usage
Unsolicited emails
“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.
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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:
http://en.wikipedia.org/wiki/Outsourcing
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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.
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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
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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
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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
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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)
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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)
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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?
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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)
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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
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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.
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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.
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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.
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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:
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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.
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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.
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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:
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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 email systems, so that information can flow
through the organization at a controlled and efficient pace.
Key benefits of workflow management include:
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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
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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 email.
The following scenario demonstrates savings in labor and time that can be achieved
when workflow technology is applied to a typical business.
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Typical Paper Trail Process
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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: 172.5
Total time (in minutes) per item if the item is in stock: 147.5
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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.”
(http://www.connexall.com/solutions).
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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.
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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-email 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.”
http://www.lexmark.com/en_US/solutions/industry-solutions/healthcare/clinicalassistant.shtml
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.”
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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.
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Questions to Ask to or About Your Computer IT Specialists
Is anyone on the team Microsoft Certified?
Yes
No
Yes
Do their IT Professionals receive weekly training, monthly, etc?
No
Yes
Do they respond to your emergency computer issues within 4 hours or less?
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
Yes
Do they have more than one IT professional who is fully trained?
Do they offer a prescheduled maintenance program?
Yes
Do they use a maintenance checklist that you can review?
No
No
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
Yes
each visit?
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?
Do they arrive on time, every time?
Yes
Yes
No
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
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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.
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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.
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