14 Aug More than just cost savings: Outsourcing as part of your strategic vision
Traditionally, IT outsourcing has been viewed merely as a cost-saving tactic, but nowadays, IT outsourcing has become a more strategic and an effective business strategy that brings added-value to the organisation. Due to latest emerging technology trends, companies are looking for speedier, more efficient and agile delivery of services that enable business transformation. This could have a profound influence on the way IT and business executives see the role of outsourcing in enabling organisations to transform their business into a digital one.
Although companies find it difficult to optimise the technology, companies that succeed are the ones that regard outsourcing as a method to improve service delivery, speed time to market and speed implementation of new technologies, boost innovation and make better decisions. Successful organisations see outsourcing not as a cost-saving tactic, but as a means and catalyst of change and transformation of an organisation in a digital way.
For one thing, it is easy to argue that outsourcing should not be seen, mainly as a cost saving method but for improving the shareholder value. In today’s highly competitive world, the attention has shifted from cost to speed, speed to value and speed to a better ROI. The shift has been so huge in the tech world that there is more emphasis on bringing value to agility and flexibility, not staying in the old business model’s mode where those things are difficult to be agile and cost effective and hard to measure the business impact.
Outsourcing works best when the supplier and partner share the same vision and enter the agreement with partnership mindset – as behind every good outsourcer, is a good outsourcing partner. Therefore, for any partnership to succeed long-term, all partners must get value from the relationship. For a provider to add shareholder value, the concept of relationships between companies and their service providers tends to mow away from contract terms to service level agreements where both parties work together to bring added value to the business as a whole. As a result, this positions IT outsourcing provider from merely a transactional provider to a strategic partner.
It is obvious that every executive wants to see better ROI and the same from their IT counterpart. IT executives are under so much pressure as they need to constantly prove their return investment and keep up with the transformation to drive the organisation forward and keep the cost down. Therefore, IT executives must make sure that their service provider is in line with business objectives and helping to meet those objectives.
Although IT executives put so much emphasis on doing business with a low-cost service provider, what they are really looking for is a technology partner that helps make a positive impact in business and help them throughout the digital transformation journey. That’s the reason it is essential that companies and their service provider must work very closely to design a new technology framework that can result in innovation, improve service delivery and deliver better ROI.
Given the pace of technology, IT executives should regard their service provider as an added internal staff and give them space to help bring the change for the better. As the technology evolves, the ability to stay up to date with latest tech platforms, trends, security, applications, IoT, big data and take advantage of those fast changing trend needs to increase.
Another important factor that organisations need to make sure when choosing an outsourcing partner is that the necessary tech skills, knowledge and qualification are in place in order to carry out the services needed. Further, companies need to keep in mind that an outsourcing partner should have a strategic eye and experience in the leading digital transformation and should be seen as a solution provider that aligns with overall strategic business objectives.
Outsourcing work should not only be delegated to IT executives as a business strategy, it should bring all the relevant stakeholders and set a shared vision for the overall transformation of the business in order to improve service delivery and enable innovation.
As noted already, the past traditional outsourcing models were merely focused on cost reduction and not necessarily focused on a long term or bringing value to the business as a whole. During this time, IT was considered a sole domain of the IT department, now IT is owned by the business and they both should work together with other relevant stakeholders and outsourcing providers to bring value to the table.
Given that IT is central to any business, this puts so much pressure on IT executives to make sure that investment in IT brings value and better ROI to the business. Also, being able to measure, optimising and justifying the IT investment remains a huge challenge for IT executives. Companies that regard IT outsourcing not only as a cost saving but as a strategic tactic and an effective business strategy that brings value to the organisations are the ones that will most likely win in the marketplace. Make sure that whenever you decide to involve a new IT outsourcing company, which both partners are willing to do everything to achieve the business goals and work seamlessly with people and process. Further, one needs to build a strong relationship and alignment with all the relevant stakeholders to get everyone on board with a goal to make the transformation work and deliver a real business value.
Fatmir Hyseni, Marketing & Business Development Manager for Kosbit – a leading provider of global solutions, business processes and managed services and a global vendor of AT&T.
As an award-winning Chartered Marketer, Fatmir is passionate about driving outsourcing industry through thought-leadership marketing. He is a professional member of the IAOP and also a regular contributor to the Global Sourcing Association, OutsourceMag, Outsourcing Journal, Professional Outsourcing Magazine, Digital Transformation People, and the Outsourcing Portal. Previously, he was the Marketing Associate the Economist.com