5 questions to ask before outsourcing your infrastructure

Networks, data centers, cybersecurity, collaboration tools and cloud may sit behind the scenes, but almost everything your organization does depends on them. When you launch a digital product, enter a new market, integrate an acquisition, connect a global workforce or scale AI, the infrastructure underneath has to adapt and keep up.

For CIOs and CTOs, the focus is on infrastructure that supports growth and protects the organization from increasingly sophisticated threats — all without costs running away.

But how do you deliver that? Should you keep infrastructure operations in-house, hand responsibility to a managed services provider, or a mix of both? Does retaining control over your infrastructure add value or, or does it add to cost and complexity?

With so much to consider, let’s look at how you can choose a model that works for today’s requirements and supports where the business is heading.

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Why sourcing decisions begin in the wrong place

There is no universal answer to these questions. The right sourcing model depends on your growth ambitions, risk appetite, operating model, existing capabilities and financial objectives. A bank facing tighter regulatory demands has different priorities from a retailer expanding their digital channels or a manufacturer connecting factories in multiple countries.

The problem is that too many sourcing decisions begin with a procurement exercise and end with a contract. That starts the conversation in the wrong place. Before asking what to outsource or which provider to choose, you need to ask what’s driving the need for change in the first place.

In my experience working with organizations in financial services, retail, manufacturing, telecommunications and the public sector, the answer is rarely one thing. Infrastructure transformation tends to become urgent when financial, operational and business pressures converge. Understanding those pressures is the first step to deciding what to keep, what to change and what to entrust to someone else.

5 questions to ask before choosing a sourcing model

Don’t start with deciding what to keep in-house and what to entrust to a partner. Step away from the sourcing models for a while and instead consider the pressures behind the decision.

These five questions can help clarify what you really need:

1. Cost: Are you funding operations or enabling growth?

Rising infrastructure costs are often what puts sourcing on the agenda. Aging assets need replacing, software renewals keep climbing and sprawling cloud environments can make spending harder to predict.

But there’s a lot more to this question than bringing costs down. Could you make costs more predictable? Reduce duplication across platforms and suppliers? Move from owning infrastructure to consuming more of it as a service? Most importantly, could you free up money that is currently tied to day-to-day operations and put it toward modernization and growth?

The aim isn’t simply to spend less but to spend differently, and with a clearer understanding of the value you’re getting.

Ask where your money is going today and whether that spending is giving the business enough in return.

2. Risk: Are you carrying more operational risk than you should?

For many organizations, particularly in regulated industries, risk can matter as much as cost.

Cyberthreats are intensifying, regulatory and audit requirements are growing, and aging technology introduces vulnerabilities.

Recurring outages, audit findings and unresolved incidents are warning signs. So is the familiar situation in which several providers are responsible for different parts of the environment, but nobody takes accountability when something goes wrong.

Outsourcing operational responsibility doesn’t mean outsourcing governance. You still need visibility and control, but you shouldn’t necessarily have to own every operational risk underneath them.

The fundamental question here is: Which risks should you continue to manage yourself, and which could a partner be better equipped to carry?

3. Business needs: Can your infrastructure keep up with where the organization is going?

Infrastructure that works for your organization today may not work tomorrow.

For example, an acquisition might require you to integrate two technology environments quickly, or international expansion can create demand for consistent services in countries where you have little IT presence.

If the business can move faster than your infrastructure can, sourcing needs to become part of your growth strategy.

Ask how easily your current model can respond. Can you scale quickly? Can you support new markets without rebuilding the operating model each time? Are technology constraints delaying products or customer initiatives?

4. Skills: Do you have the expertise to do this yourself?

You can have the right technology and a clear strategy, but you’ll struggle to execute if you don’t have the right employees.

Cloud engineering, cybersecurity, AI and automation all require specialized skills that are difficult and expensive to acquire (and maintain) for every infrastructure domain. Experienced employees are retiring, competition for specialist talent is intense, and the skills you need keep changing.

Trying to build everything internally may therefore make little sense.

Which capabilities are important enough to your differentiation that you should own them, and where would external expertise give you greater depth, scale or speed?

5. Timing: How quickly do you need to change?

Sometimes you have years to rethink your infrastructure model — but sometimes a contract expires in six months. Vendor exits, technology refreshes, regulatory deadlines, acquisitions and major transformation programs can all impose a timetable of their own, and that timetable can change what’s realistically possible.

A model that makes sense over three years may be impractical if you need to migrate a platform, establish operations in a new market or address a regulatory requirement within months. So, when thinking about where you want to end up, also consider how quickly you need to get there. The time available may determine your sourcing options just as much as the destination itself.

The opportunity: 3 ways to transform and run your infrastructure

Once you understand what’s driving change, the next question is how much responsibility you want a partner to take on. Broadly, there are three approaches, ranging from getting expert advice while retaining control to handing over responsibility for defined outcomes.

1. Optimize before you outsource

You don’t have to decide up-front that outsourcing is the answer. Sometimes the first step is simply understanding what you have today, what needs to change and which operating model makes the most sense.

If you’re still exploring your options, need to build a strong business case or want to simplify a complex supplier landscape before making bigger sourcing decisions, focus on:

• Technology strategy
• Target operating model design
• Cost and benchmark assessments
• Service-tower evaluation
• Vendor and market analysis
• Future-state architecture

The goal at this stage is clarity about what to change or retain, and where a partner could add value.

2. Transition to joint control

Outsourcing doesn’t have to mean handing over everything. Many organizations want a partner to take responsibility for selected operational areas while they retain control of the capabilities and decisions that are most crucial to their performance.

You might retain:

• Enterprise architecture
• Risk ownership
• Governance
• Policy and standards
• Business relationship management

Your partner can then provide:

• Operational expertise
• Automation
• Specialist skills
• Managed infrastructure services
• Support for transformation

The principle is straightforward: Retain control where it matters and bring in external capability where it can make you faster, more efficient or more resilient.

3. Transform to outcomes

At the other end of the spectrum, you can move beyond outsourcing individual technologies or operational tasks and make a provider accountable for defined outcomes. Instead of measuring success primarily by how well your infrastructure is managed, you measure the outcomes it enables, for example:

• Service availability
• A better customer and employee experience
• Improved security posture
• Fast, reliable application performance
• Business resilience
• Speed of innovation

The provider can take responsibility for multiple infrastructure areas, including network, cloud, digital workplace, security, service desk and operations. That reduces the burden of coordinating different technologies, teams and suppliers yourself.

This approach is particularly attractive when you face significant operational complexity, cost pressures or skills shortages. It’s also worth considering if you have environments in different geographies, or if you’re undertaking a major transformation program.

The key difference is accountability. Rather than asking a provider to manage a collection of infrastructure components, you’re asking them to take responsibility for how those components work together — and for the outcomes they deliver.

Start with the right sourcing questions

Whether or not to outsource isn’t your main concern. More importantly, you need to know what to keep under your control because it differentiates your organization, and what a partner could deliver better, faster or with less risk.

Get that balance right, and your operating model can give you the skills, flexibility and resilience to support everything from cloud transformation and automation to AI.

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What to do next

Read more about NTT DATA’s Infrastructure Solutions to see how we can help you modernize and consolidate your IT infrastructure.