What's Driving The Need For Outsourcing And What Does The Future Hold
Almost anything can be outsourced, but is outsourcing in your best interests? And what results should you expect if you choose to go this route? In this exclusive interview, Mark Clayman, CEO and President of TriCore Solutions, looks at the past, present, and future of outsourcing, as well as best ways to capitalize on it.
BSM: What can be outsourced?
Clayman: Almost any IT function can be outsourced. This can be end user support, email, collaboration tools to the data center and the core infrastructure (servers, storage, network, security) housed through the operating system, database, middleware, application technical, functional support, and on to business analytics and reporting. The one function we as managed service providers recommend for organizations to maintain and develop is the business analyst role that is the interface/bridge between the business and end user needs/requirements and the IT delivery function. This ensures that IT is being utilized as effectively as possible to enable the business drivers.
BSM: Why should someone consider outsourcing?
Clayman: There are a number of reasons companies choose to outsource, but most organizations tend to focus on some combination of the following:
- reducing, eliminating CAPEX, and converting over to a more flexible OPEX model
- access to a broader and much deeper pool of IT resources
- implementing and/or improving the security compliance approach for an organization
- create more flexible use of it services (up and down)
- lower financial risk of future IT investments
- improve end user and/or customer experience
- enable the organization to access latest technologies
BSM: What consideration should be taken before making the decision to outsource?
Clayman: Companies should consider choosing the right provider(s) that not only fit the organization from services requirements standpoint, but also culturally. While the contracts are focused around IT services, this is as much about relationships and trust as anything else. Additionally, understanding the capabilities of your own staff to help enable a successful partnership with a service provider is very important. A good Business Analyst and/or Project Manager(s) are key to managing the relationship as they are able to communicate the scope of needs that will be required effectively. Change is something that can create fear, but good service providers will own the transition effort, minimalizing the disruption to the business and resource drain.
BSM: What results should be expected?
Clayman: By choosing to outsource, a larger team can help to “get more things done” for the organization. For example, companies will receive greater speed, reaction time, and more flexibility than what a typical organization is used to operating internally. Additionally, improved performance, not only from the people but from the infrastructure, is a key and immediate benefit. Throughout the process, continuous improvements should always be a focus of both sides of the partnership. Finally, minimizing the time and effort for a company to spend on operations and maintenance and therefore quickly getting into discussions around what technologies and solutions the service provider has to offer to enable the organization to hit the running.
BSM: What is driving the need for outsourcing?
Clayman: There are many reasons to outsource (greater speed, reaction time, flexibility, etc.). The important thing to note is while there is never a bad time to start outsourcing, there are some drivers that make it easier and more natural based on certain events, including a pending upgrade to the infrastructure, a corporate development event (e.g. acquisition or divestiture), a pending upgrade to an application, key loss of an employee(s), significant change in budget constraints, and significant increase in projects that the business needs to focus on versus operations/maintenance.
BSM: How can a business best capitalize on this opportunity?
Clayman: Any number of ways, starting with talking to a number of service providers. Be clear as to any tactical or strategic goals that they are trying to achieve and identify what they would consider to be a successful outcome. Think about more than just handing over the operations of the outsourced function, but what more do they want out of the partnership. And make sure there’s buy-in from the IT group and key business leads.
BSM: What is the “next big thing” in outsourcing? What does the future look like?
Clayman: Integration. Being able to leverage on-prem, private hosting environments and public cloud solutions as a “single DC environment” for an organization is becoming more and more the reality. On the application side, larger enterprise applications may start to break down and be delivered by niche players that are extremely deep from a functional standpoint and IT organizations will be tasked with integrating all of these outsourced functions and solutions and at the same time reporting across all functions (business and IT). Lastly, all IT services will continue to move towards pay as you go. The flexibility that this will provide an organization will be invaluable if they best understand how they’ll be able to take advantage of it.