IT Labor Costs
Outsourcing Still the Best Value as IT Labor Costs Climb
Supply chain disruptions tend to have a ripple effect across industries. The COVID-19 pandemic caused an unprecedented disruption, resulting in product shortages and higher costs that will be with us for the foreseeable future.
The electronics industry was particularly hard hit as manufacturers faced extended shutdowns. Global shortages of memory, for example, impacted the production of everything from computers to automobiles. Companies implementing new IT solutions still face delays and higher prices.
But the biggest constraint the IT industry faces is labor. The IT skills gap has been a pervasive problem for many years.
There simply aren’t enough IT professionals to fill open positions and meet project requirements. Pandemic-related lockdowns created pent-up demand that has exacerbated labor shortages and increased costs.
Outsourcing IT projects remains the best value as labor costs climb. The fully loaded cost of hiring experienced IT personnel is generally higher than the cost of an outsourced solution. Additionally, qualified outsourcing providers such as SirviS assume responsibility for locating resources with the right expertise and ensuring that the project is completed on time and within the agreed budget.
Why Outsourcing Makes Sense
SirviS relies on a global network of providers to deliver engineering and field services. We’ve found that some contractors were forced to take full-time jobs when projects were put on hold, reducing the available resources in the marketplace. This has put pressure on the cost of doing business, and we expect that to extend well into 2022.
Of course, we’re not the only IT company that’s facing higher labor costs, and customers that choose to hire IT staff are going to have to pay more to fill those positions. The dynamics of the IT industry have not changed. If anything, companies are feeling an even greater squeeze as they attempt to assemble the resources needed to complete important projects.
Outsourcing to a provider such as SirviS is an efficient and economical way to get things done. SirviS has continued to scale over the past year to meet the needs of VARs and their customers. We can quickly assemble a team with the right skill sets to meet project requirements and provide comprehensive project management services to ensure a successful outcome.
Strategies for Preserving Capital
As labor costs increase, projects can become quite expensive. However, there are short- and long-term strategies that can help preserve capital and meeting budgetary requirements.
One approach is to spread costs over a longer period of time through planned rollout schedules. Organizations can also utilize leasing programs — many customers are unaware that you can roll labor costs into a lease when doing a large-scale implementation or hardware refresh. This can help reduce the costs customers have to absorb at the front end.
SirviS will also work with customers to lock in project costs and negotiate the maturity date on a statement of work. Once we know that a project has been booked, we can start working to get the resources in place and avoid excessive cost increases.
Another great approach is to allow SirviS to perform an asset audit to determine where there might be hidden cost savings. Often, customers are paying maintenance on legacy equipment that should be replaced, or maybe the equipment is no longer critical and doesn’t need a 24x7 SLA. Customers can save a lot of money by simply right-sizing their maintenance contracts, freeing up funds for important initiatives.
Bottom line, SirviS is here to help customers get a handle on rising IT costs. Bring us your project and let us see what we can do to meet your business, IT and financial needs.