Making IT outsourcing work
posted in Outsourcing News and Top Outsourcing deals |Source: www.itweb.co.za
STEPHEN FLOYD : The concept of outsourcing is not new; it has been around for years in the form of one party contracting another to manage a business process more effectively and efficiently than it could be done in-house. IT outsourcing, on the other hand, is a relatively new discipline.
“Today’s IT outsourcing is different from the computer bureau services of the 1960s and 1970s because information technology plays a central role in almost every facet of business today,” says Stephen Floyd, head of core services at Fujitsu Services South Africa. “The bureaus of old mostly processed simple billing functions and had no idea of managing the complex, integrated applications, networks and servers that are common today. And let’s not mention the Internet.”
A decision to outsource IT processes in the 21st century will place a much greater reliance on the quality of the service provided by the outsourcer than ever before. This means the process of choosing a supplier is just as important to the outsourcee as is the reason for wanting to outsource in the first place and the fundamentals of the contract.
“Outsourcing can be a spectacular success if it’s done correctly and for the right reasons, follows due process and is based on realistic expectations and a clear understanding of where the benefits are likely to be experienced,” Floyd adds. He suggests companies thinking of outsourcing should understand and take note of the following points as they form the basis of a good strategy:
* The importance of following a sound process in selecting the provider and designing the contract.
* The critical role played by the service provider’s infrastructure management methodology - or lack of it.
* The importance of developing an appropriate focus on costs and benefits, and understanding what and how benefits may emerge.
* The need for both parties to dedicate resources to properly manage the relationship.
* The need for new incentive models that reward both individuals and organisations for success.
* Understanding that failure is always a joint responsibility.
* And above all, understanding that outsourcing driven by price alone almost certainly leads to disappointment.
