Outsourced NOC vs. In-House NOC: 3 Factors to Consider

Today, the effectiveness of the Network Operations Center (NOC) is essential for enterprise and service provider companies with comparatively large IT infrastructures.

One of the biggest decisions companies have to make in building, expanding, or optimizing a NOC is whether it’s best to manage support in-house or outsource it to a third-party service provider.

Although some may assume an in-house NOC affords greater control and is therefore preferred, the right outsourced NOC operation can offer a suite of capabilities and efficiency advantages that dramatically tip the scale in terms of cost and value.

The control and assurance once afforded by keeping the NOC in-house have largely been upstaged by third-party service providers that have bridged those gaps and developed platform capabilities that simply wouldn’t be viable in-house investments due to low utilization.

With the same or better level of control and the significant cost-efficiencies gained by eliminating the need to build and maintain a platform and staff in-house, it’s vital for any company seriously considering an in-house NOC to carefully determine whether the added costs, effort, and responsibilities are worth it.

Here, we’ve broken down three significant factors to consider when making such a decision.

1. Operational Maturity and Access to Expertise

The main point: Building and maintaining a NOC requires special expertise to develop its operational framework and gain maturity. Finding NOC specialists with this expertise can be challenging, but it's critical to avoid operational blind spots. Outsourcing NOC support provides immediate access to this expertise, reducing the time and effort it takes to build an operational NOC in-house.

Perhaps the most apparent difference between homegrown and outsourced NOCs is the immediacy of service and access to expertise.

Compared to the months or years it can take to find NOC specialists, build a team, and bring an operationally mature NOC to life in-house, turning up support with an outsourced NOC condenses all that time and effort into just a few weeks—often far more cost-effectively.

Finding NOC specialists with the requisite domain expertise is a challenge in itself. But developing an operational framework on which to run the NOC is its own under-appreciated project. It requires exceptionally specialized experience, which can be difficult to find in the labor market.

This talent specialization is critical to ensuring the NOC can effectively navigate all the operational challenges that impede its success and flexibility. Operational blindspots—the things you don’t know you don’t know—are a frustratingly common tripping point that can have far-reaching consequences for a NOC and the business. When the NOC isn’t thoughtfully operationalized around specific challenges, it has almost certainly signed itself up for stressful and expensive problem-solving down the road.

Learn more about the service delivery our clients inherit via our Ops 3.0 platform:

Virtually every high-performing NOC has a sophisticated operational framework to thank in large part for its success. Especially in larger organizations with complex IT infrastructures, an effective NOC is much more than a manager with a team and some tools. A look behind the curtain reveals a sophisticated governance structure that integrates back-office support teams and various tools and processes that unlock the efficiencies that have become increasingly necessary to meet desired service levels.

For this reason, it’s critical for a company considering building or expanding an in-house NOC to ask themselves whether they have the experience and expertise to understand whether and to what extent their support function suffers from any of the common operational challenges.

Assumptions built on an incomplete picture of the challenges and opportunities can unintentionally handicap the NOC from the outset—an issue that can pose immediate problems to network operations and create long-term challenges when operational drawbacks make it difficult and expensive to expand support to new services.

Simply put, to overcome the everyday challenges of an under-operationalized NOC, it takes specialized professionals to first identify and characterize those challenges in the environment before developing an operational plan to overcome them.

Key Questions:

• Does your team currently have the deep domain expertise needed to clearly identify the root causes of each challenge your NOC will need to address?

• Does your team have the expertise needed to develop an operational structure that solves for the challenges your operation is currently experiencing and those it may encounter in the future?

• How long do you expect an in-house NOC to take before it’s fully operationalized, and what risks to the business exist in the interim?

2. Relative Costs

The main point: The cost of staffing and platform acquisition, implementation, and integration are crucial factors to consider when deciding between outsourcing the NOC or building one in-house. In most cases, even for enterprise organizations, outsourcing provides better service at a lower cost due to economies of scale, and it can also avoid unforeseen expenses that may arise during the build process.

While costs impact every component of this decision-making process, it’s important to understand the basic math that is often the most straightforward and compelling factor.

We’ve broken the question of cost into two main areas: staffing and platform.

Staffing

Given that most NOCs require a minimum of ten people to provide reliable 24/7/365 support, comparing the total in-house human resource expenditures to a much smaller team of outsourced FTEs operating in a fully mature NOC environment can lead to a stark realization.

For most companies, staffing a NOC is often a needlessly high expenditure compared to outsourcing that support. A plan that doesn’t consider this opportunity might, for example, call for a staff of 12 full-time employees, when in fact, the same or likely better support could be provided through an outsourced service solution that takes full advantage of an economy of scale to provide far better service at a far lower cost.

Platform

Apart from staffing, the cost of acquiring, implementing, and integrating a full suite of NOC tools only further tips the scale in favor of outsourcing much of the time.

Monitoring, ticketing, knowledge centralization, and reporting are just a few essential NOC functions requiring tools. Together, these can constitute a massive expenditure even though their low utilization in most homegrown NOCs doesn’t justify their high price tags. More recent technologies like machine learning and automation (AIOps) only add to the balance sheet, not to mention the difficulty of implementation.

It’s not uncommon for companies to learn that given the payroll and overhead costs of building a NOC in-house, electing for outsourced support can cut their total cost of ownership in half. 

Much of these cost savings are realized beyond the obvious expenditures. A litany of important cost questions can remain in the blind spot, only to surface later as expensive problems when they went unanswered at the outset of the build.

We’ve included a sample of these questions below and the more general cost considerations.

Key Questions:

• Have you compared the costs of hiring an in-house team to an outsourced team?
• How do the requirements necessary for maintaining an effective NOC impact the payroll expenses for securing expertise?
• Have you considered the back-office staff needed to support the NOC and its associated costs?
• Have you considered the full-freight costs of purchasing and implementing an AIOps platform? Do you have the operational capability and expertise to continually improve its machine learning to make better correlations and reduce MTTR in responding to incidents?
• Is your human resourcing team aware of, and prepared for, the added workload of hiring into an in-house NOC?

3. Speed to Market

The main point: In-house NOCs take a minimum of 16 to 24 weeks to set up and months to gain control while achieving operational maturity can take years. Finding and hiring talent with the required expertise can be a significant hurdle, delaying the project considerably. Outsourcing NOC support collapses that timeline into just a few weeks.

The third significant difference between in-house and outsourced NOCs is the time it takes to bring service online.

Between planning the build, hiring a team, training that team, and aligning over the operational plan, in-house NOCs can expect 16 to 24 weeks minimum before all the parts are even in place. It can then take months to gain confident control over the system.

For many companies, it can then take years to gain operational maturity—the point where the NOC has the data, technical capability, and supplementary support it needs to improve itself continually.

Finding and hiring talent is perhaps the first and most significant major hurdle to getting a NOC up and running, let alone mature. Simply put, the deep operational background required for building a sophisticated NOC is hard to find and expensive to acquire. But it’s exactly this expertise that is critical at the outset of a build. Once a company identifies its full range of support requirements, the seemingly simple task of resourcing a qualified management professional can considerably delay a project.

Here at INOC, we draw on our extensive experience in designing and implementing NOC operations to deliver comprehensive best practices consulting for designing and building new NOCs and helping existing NOCs significantly improve the support provided, whether that support remains in-house or is managed by us.

Key Questions:

• How do your NOC requirements impact the time you could expect to get a homegrown operation running and operationally mature?
• What risks will your business services remain vulnerable to before an in-house NOC could be deployed?
• How do the required skillsets for building and managing an in-house NOC impact internal payroll expenditures and the timeline for the build?

Summary, Final Thoughts, and Next Steps

While some circumstances can make an in-house NOC advantageous or required, many companies can simply get better support and more capability for less overall cost by outsourcing with the right NOC partner (sometimes referred to as NOC as a Service).

Finding and hiring experienced staff and upgrading often underutilized technologies can steal resources and attention from revenue-generating projects. In many cases, investing in outsourced NOC support enables a higher ROI by providing all the NOC resources needed without the responsibility of managing and continually investing in them.

Want to learn more about our approach to outsourced NOC support? Contact us to see how we can help you improve your IT service strategy and NOC support or check out our other resources and download our free white paper below.

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