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Business
and business demands do not follow a set pattern. They adapt to changing markets
and desire similar behavior from IT, IT systems and other enabling functions.
For alignment to these expectations without carrying overhead, one of the
options available to IT organizations is to outsource technology management as
well as development activities thereby providing a model for flexible upscaling
as well as downsizing. Also as many enterprises consolidate their business
activities to focus on core competencies, it's best to outsource the
technology function where obsolescence catches up within 6-12 months. Cost is
one of the drivers.
Pfizer outsources the
management of the network, desktops, peripherals, servers, administration and
development activities. Thus we are able to manage the technology activities
with a small team.
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| Arun Gupta, CIO, Pfizer |
Outsourcing helps us
ramp up or scale down our resources effectively. At the same time we are in a
position to drive service level agreements (SLAs) and provide our business users
with solutions quickly.
Total outsourcing can
work in companies with a high level of management and IT maturity where the
perception of risk is adequately managed. Very few total outsourcing deals have
borne the results that were set up in the initial charter. Most of them have
reverted to retaining the strategic functions in-house. The dependence on a
single service provider has been one of the stumbling blocks either due to the
attitude of the service provider or the internal users. Success in a total
outsourcing model is based on clear expectations and the spirit of partnership
where the vendor acts and works like an extension to the organization.
| Total outsourcing can work in
companies with a high level of management and IT maturity where the
perception of risk is adequately managed |
The areas impacted by
outsourcing are people, processes and efficiency. If a function already exists
that is being outsourced, then the people have to be managed with care to ensure
transition of tactical knowledge else a gap will be visible in the service
immediately. Current processes should be well documented to provide the service
provider with a foundation on which they can build.
Some best practices for
efficient outsourcing are to ensure that you have management buy-in before you
begin. Communicate the rationale on why you want to outsource to your customers,
service providers and management. Set realistic targets on what you want to
achieve. Measure periodically what you set out to do and where you are in the
continuum. Do not negotiate down to the proverbial last drop, try to ensure that
there is a win-win feeling. A contract is great, but people drive the business.
While you have to ensure that every activity and SLA is well defined, the spirit
of the engagement will drive success.
Give adequate time to the service provider to learn your business, expectations
and corporate culture.
As told to Minu Sirsalewala
minuvs@cybermedia.co.in Page(s) 1
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