One national retailer was spending tens of millions a year on in-house IT. When devices failed in their stores—POS systems, barcode scanners, timeclock units—they dispatched their own technicians by car or plane. The belief was that their techs had proprietary knowledge that couldn’t be outsourced, but the model was unsustainable. Uptime was inconsistent. Costs were climbing. And innovation stalled.

“By outsourcing IT workloads like end-user support, onsite techs, and lifecycle services, a retailer like that can cut 25% off the top,” says Brian Gatke, VP of GTM Solutions Strategy and Portfolio here at Connection. “You also gain automation, tighter system control, and better uptime.”

Modernization was the turning point. Connection helped them consolidate disparate in-store devices into a single mobile platform and replace multiple legacy systems with tablets. That shift simplified support, reduced spend, and improved the store-level user experience.

Like this retailer, 78% of businesses report positive experiences with IT outsourcing, citing improved service quality, cost savings, and strategic value.⁵ According to ISG, enterprises that outsource IT functions save an average of 15%.⁶ At the same time, their quality performance increases by more than 11%. This is the opportunity of ITO. Done correctly, it can drive long-term scalability, resilience, and simplicity in IT operations.

In spite of the promise of ITO, there are good reasons to be strategic with your vendor selection. Everest Group found one of the big drivers of dissatisfaction with outsourcing is service pricing.⁷ Companies considering outsourcing for cost savings may be tempted to pick the partner with the lowest price. However, there is a much larger picture to consider, including longer term renewal costs, ability to deliver, and innovation.

Choosing a partner based purely on upfront price is almost always a false economy. It does not consider the total cost of ownership. Some vendors increase their fees significantly after the first year, often doubling or tripling them. Or their pricing model leads to unpredictable costs from things like change management. Rock bottom rates can also mean the vendor has less experienced personnel.

There are several issues that can arise when dealing with lowest-bid outsourcing vendors. Budget-focused providers may deprioritize continuous improvement, leading to stagnant processes and excessive manual work. Furthermore, their rigid, inflexible contracts may not evolve with your business needs, putting transformation projects on hold.

Vendors can also increase your exposure to risk through inadequate practices in data protection and compliance. Or, weak SLAs and under-resourced support teams can create lags in issue resolution, hurting productivity and user satisfaction. Some low-cost vendors just lack capabilities in managing modern digital environments, which ultimately impairs scalability and adaptability. The better approach is to prioritize building lasting partnerships with vendors.

According to Gartner, organizations are moving away from transactional outsourcing in favor of outcome-based contracts.⁸ Per Deloitte, 67% of organizations have already made this shift.⁹ These new outcome-based engagements almost always start with shared intent.

There are three critical attributes to look for when selecting an outsourcing partner. The first is cultural fit. An ITO provider should operate as a true extension of your team, not a transactional vendor. Alignment in work ethic, communication style, and accountability makes collaboration smoother and more productive.

Another attribute is a proven focus on innovation. The right partner will bring continuous improvement to the table—from automation opportunities to modernization strategies—without having to be asked.

Lastly, look for a history of stability, clear SLAs, and the ability to scale alongside your business. High turnover or constant re-scoping are red flags.

A deeper level of foresight and execution can happen in a relationship where the provider is deeply invested in your success. In the case of one fast food chain, Connection’s Technology Integration and Distribution Center color coded and pre-kitted the hardware, creating a solution so intuitive that store-level staff could replace core equipment without needing tech support. This kind of creative thinking significantly reduced downtime.

At the end of the day, the goal with outcome-based approaches isn’t just to hit SLAs but to deliver continuous value aligned with business outcomes. A strong ITO relationship drives trust, stability, and innovation that a lowest-cost contract simply can’t replicate.

The most strategic place to start outsourcing is with labor-intensive, hardware-dependent functions. One of the most common areas for ITO is lifecycle management. This service area is seeing significant growth, with Gartner predicting that 70% of companies will adopt a managed device lifecycle offering by 2028—a more than 50% increase from 2024.¹⁰

It simply doesn’t make sense for most companies to invest in the staffing and processes to maintain assets when a vendor already has the infrastructure, certified technicians, and geographic coverage. In our earlier example of the national retailer, you can see there are significant savings to be realized if you have the right partner.

When looking for a lifecycle management partner, it’s important to assess their supply chain. Do their systems integrate with your ERP? Do they have good relationships with OEMs? Are they skilled at forecasting, supply, warehousing, and logistics? Most importantly, will they increase “speed to use” and deliver an exceptional employee experience?

Great lifecycle management requires orchestration. All activities from supply chain to end-of-life must be managed from a central command center—like Connection’s ConnectONE— in a way that ensures seamless operations, visibility and quick response times.

If you don’t have the budget to outsource your entire lifecycle management, consider starting with your service desk or refurbishing devices to help lower capital expenses. There are many IT functions where you can test the waters with a vendor before going all in.

The right IT outsourcing partner won’t just lower your costs. They’ll strengthen your operations, improve your user experience, and scale with you.

Key areas where companies are realizing significant cost reduction from ITO include service delivery, service desk, labor and procurement, and hardware. Optimizing your IT operations is a journey, but one you don’t have to take alone.

If you are looking for an outsourcing vendor who will be a true partner, Connection has been named one of the “Most Trustworthy Companies in America” by Newsweek. We take a relationship-first approach to ITO. From device provisioning and support to logistics, onsite services, and end-of-life planning, we deliver the flexibility, transparency, and partnership that modern IT leaders need.