Strategies for Successful Outsourcing

Outsourcing strategy is a plan derived from assessing IT functions that are better performed by an IT outsourcing service provider than by an organization’s internal IT department. The goal of an IT outsourcing strategy for most of the organization is to provide the best possible technology to the organization at the lowest possible cost. The best possible technology with resources and lowest cost, however, tends to be fluid due to rapidly evolving technologies. Outsourcing facility services can be a monumental challenge for organizations that perform those functions using in-house staff. But as even the most routine tasks become more complex, facility executives search for innovative ways to improve services and save money.

Set context and objectives

Define the business’s approach to sourcing and the priorities as well as rules and principles that will drive the sourcing strategy and every subsequent decision and activity. All the business, service and technical goals for sourcing initiatives and relevant measures of success should be defined properly.

Assess service delivery ‘as is’

Assess the organization’s current internal and external capabilities and determine the loop holes and prioritize the processes. Look at the cost, service performance of the internal and external sourcing and service contracts that are in place already and also determine what will get affected. Examine all the enterprise architecture and determine if it is adequate to support the service delivery evolution required to achieve objectives.

Assess service and multisourcing management capability

Determine the maturity and level of the multisourcing within the organization to determine current and required capabilities and opportunities. Evaluate all the knowledge and skills for managing service delivery on business, application and infrastructure processes.

Evaluate constraints and opportunities

It is very necessary to consider all types of constraints and opportunities, including business forces, overall economic cycles, disruptive technologies and compliance requirements and internal organizational issues. Build sourcing risk profiles and apply a risk management framework and also work on the issues to make it better.

Analyze gaps

While taking a sourcing decision, define the set of needs and objectives, measure those as much as possible, and compare these with the ‘as is’ situation and determine the gaps. Start determining what alternative approaches or scenarios the organization could use to fill the gaps. We can also do first comparison of scenarios against drivers, goals and risks and determine where the gap is and how to fill it.

Analyze external market

Evaluate the IT services market dynamic, changing vendor landscape and adoption patterns of competitors. Consider the availability, maturity, quality versus cost, and stability of service offerings. Leverage the market analysis to decide what type of services to adopt and when. Refine the alternative sourcing scenario to drive business value and stay ahead of competitors.

About Author:
Shailesh Nambiar is consultant and part of Systems Plus Pvt. Ltd. He actively contributes to information technology and VMO. He can be contacted at: shailesh.n@spluspl.com