Nov 18, 2014

Teaching the old dog new tricks – IT outsourcing

Author: Alexandra Stanculescu

For many years now, there has been a lot of noise around outsourcing in general, and, more particularly, around IT outsourcing. The topic seems to have followed the natural cycle of all novelties. It has gone from being the fresh buzzword to being one of the CxO forum debates and, finally, after years of continuous growth and after having survived countless market trends, it has become the old dog we all know and have at least once considered adopting. But is there anything new to take in, perhaps something to be summed up from the extensive experience in the field, something new to be shared and pondered upon?

The IT outsourcing dream

Imagine you could snap your fingers and, in an instance, your company need only focus on core business processes, while all non-related-but-impossible-to-do-without IT functions would be taken care of by a specialist. Since they obviously know what they’re doing where computers are concerned, operational costs would decrease and your days of worrying about keeping technology up to date – process which never seems to end – would be over.

Or imagine that an SME working on developing a new software application – say, for instance, a 360 feedback solution – could instantly access much needed extra expertise and have people with experience in implementing HR solutions and big-business-like resources help deliver a cutting-edge application straight to the customer, with decreased risk and no added recruitment cost.

Then why is there an almost mystical shadow of potential disasters hanging atop every CEO considering outsourcing?

One hears outsourcing-related horror stories almost as often as one does success stories. Probably the most vicious enemies of such projects are bad communication and unclear enunciation of deliverables and milestones. The client expects one thing from the collaboration, while the outsourcing company believes they should deliver another. Add language barriers and improper time and task management to the equation, and the result is very likely to be mutually unsatisfactory. Time frames become less-than-a-rough-guideline, quality control translates into a mere theoretical concept, and responsibilities start being passed-around from one to the other.

Another crucial element to be considered is flexibility. Rigid time and budget control can often result in applications that do not achieve their full potential or can, in time, reveal hidden costs and possibly even ownership-agreement issues. Moreover, some urban business-legends regarding the risks of exposing confidential data have been sadly confirmed to be true.

With this much at stake, why would an organization risk outsourcing?

Realistic reasons for yielding to the temptation of IT outsourcing

With transparency and commonsense defining of milestones and deliverables, a company can go a long way where outsourcing is concerned. If we count up proper formal communication and documentation, success is almost surely on the way. It is best to err on the side of too much communication or too many updates, than to err on the side of too little transfer. You may expect interactions to go a bit slower at first, but given that first week of patience, while both organizations get accustomed to one-another and to the project, things will go smoothly if responsibilities are properly assigned and there is mutual understanding of who’s doing what.

The dream is surely tempting, and the potential benefits can by far outweigh the potential risks, especially if wants are phrased in a clear, deliverables-and-time-aware manner. But there are so many outsourcing models out there – dedicated developers, full-scale project-outsourcing, even build-and-operate. How does one choose the best option in a specific case? Keep in touch with us via our RSS feed if you’re interested in finding out more, as we’ll be exploring the matter in more detail with upcoming articles.

In the meantime, talk to us: tell us about your outsourcing dreams and nightmares, let us know what you’d be interested in discussing with future articles. If you’d like, you may contact us in private, via e-mail.

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