Gains
from IT sourcing strategy should be expected to be naturally aligned
with a degree of corporate risk and the management of these via a
corporate retained governance layer specifically at times where
multi-supplier or multi-sourcing for competitive advantage,
performance-enhancement and reduction in operating costs, is
increasingly attractive an option in
post-recession-hungry-for-more-times. Such supplier-management
governance layers have an inherent cost and value built-in which could
ideally stop at the service management integration layer where
platforms, process, infrastructure, communications and people
capabilities from the supplier-stratosphere are best left to deliver the
value they are contracted for. The retained-governance layer provides
the key ingredients of service management which on the one hand,
underwrite the service delivery for the internal or end-customers, and
on the other, manage the supplier relationship to ensure the expected
value from the outsourcing contract is assured. Customers who invest in
this aspect clearly ascribe the required focus to the decision and will
most likely therefore, follow a meticulous review and reporting
mechanism which yet again ensures the strategy is always on the radar,
visible.
While
the customer organization manages the risks of integrating multiple
vendors to benefit optimally from multi-sourcing it is almost a
business-imperative and often an incredibly daunting challenge to
step-back and leave accountability, contractual and human, with the
supplier-engines, in the interests of deriving, in good measure, the
value- unique to the individual suppliers and the essential-health of
the customer-supplier relationship which progressively delivers
quantifiable shared-value. A failing relationship can cause service
delivery to become less effective and more costly even when all
contractual obligations are being met. Ironically, the real challenge
remains in a lack of understanding of the most appropriate way of
engaging with the services supplier.
The transformational value of strategic-
outsourcing
and partner alliances follows well-crafted fail-proof plans where the
health of the relationship remains at the heart of the matter and most
important metric is C-SAT and not resolution-rates and percentage
closure on Priority-One incidents not taking away from the significance
of keeps nuts, bolts and the odd-component in a top-form. A productive
partnership will deliver value via innovation and the supplier will keep
moving a notch-up the value chain. All this, while being predicted-upon
contractual terms, always requires a leap-of-faith and also, a larger
leap away from one’s non-core outsourced operations with a longer-term
view to take a “hold” position even as the Bulls and the Bears in the
stock-market swing the pendulum when organizations find they stand at a
perceived inflection-point when hard-decisions need to be taken.
Hard-decisions, most certainly do need to be taken; wrong decisions,
most definitely not! It has been found that the primary cause of
repetitive failure at successful partnering are most-often rooted in
knee-jerk reactions towards cost-recovery, hasty corporate
restructuring, and “taking-IT- back-in” all on account of discovering
the obvious while mid-course, which is, outsourcing offers much that is
tangible when managed well. In addition to reduced-costs and a scalable
skilled workforce, this includes, project control, best practices, risk-
offsets, among others. But realizing some or all of these benefits is
directly linked to good-planning and a staying-course with a carefully
laid out strategy, especially if outsourced resources are offshore.IT Offshoring and Outsourcing
Overwhelming
emphasis on reducing IT sourcing contracts costs result in short term
gains, cause multiple weaknesses in relationships, integration
effectiveness and innovation, which by themselves can bring cost
reductions. Instead, there customer organization is left with paying the
price of facing unexpected costs in resolving failing outsourcing
contracts.
Customers
are constantly re-assessing their outsourcing contracts and are seeking
to build in continuous improvement and innovation clauses as these
contracts come up for renewal. Suppliers are increasingly required to
deliver continuous improvement in their service delivery as this remains
a significant opportunity to add further value to the business in hard
times.
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