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Technology Outsourcing

Top Tips: How to Revolutionise Your IT Outsourcing From SQS

27-08-2014-how-to-revolutionise-your-it-outsourcing-ben-fry-sqs
With over 20 years’ experience in delivering successful  IT projects, Ben believes that even the most complex projects can and should achieve the desired business goals, on time and to budget, with no compromise on quality.  He is an industry recognised authority on IT delivery, with a string of published articles to his name.  His book, The Quality Initiative, is helping to stimulate the IT quality debate at Board level.


27-08-2014-how-to-revolutionise-your-it-outsourcing-david-rigler
With over 20 years’ experience in the software industry, David’s expertise covers
complex IT problems, multi-sourced environments and IT strategy. He has experience in writing and testing applications across the full range of applications within various industries including financial services, utilities, retail, manufacturing, defence and government.


David and Ben consider how working with the right suppliers can help businesses become more agile. 


With IT change accelerating at an unprecedented rate, many businesses are becoming paralysed by their inability to keep pace, but it doesn’t have to be this way.  Here are five tips for taking the right steps towards a multi-sourcing strategy.

 

1.             Identify the issues that are holding the business back
A big first step for any company is accepting that they are unable to keep up with new technology.  Once that is realised it makes the process of looking for external help that much easier because you have the buy-in of business stakeholders. Some of the common problems can include:

 

* Time and budget is consumed by keeping the lights on leaving little or no room for innovation
* A heavy reliance on legacy systems makes it difficult to introduce changes
* Pressure to respond to new business requirements quickly is being done without proper risk mitigation
* Lack of new software development skills

 

2.             Review your current outsourcing process
In reality, it’s neither practical nor feasible to embark on transformation alone. If organisations insist on doing so, they will be limited to their existing technologies and any innovation will come at either too high an investment (reinventing the wheel) or small pockets of innovation driven out of a personal desire to see what’s possible rather than a strategic drive to leverage technology to enchant the organisation’s target audience.

 

The trend to outsource to one, maybe two larger suppliers, however, does not necessarily provide the best solution, especially when innovation is the actual goal.  Often larger BPO and ITO organisations are too strongly focused on reusing existing practices and processes in order to maximise savings.  While cost savings are important, transformation requires organisations to introduce new innovation, new skills and new approaches, and typically this involves having access to a variety of specialists.  So organisations with innovation in mind shouldn’t limit themselves to working with one or two suppliers. 

A smarter approach advocates that suppliers are selected based on their skills, experience and ideas around a specific area or business challenge (e.g. mobile apps, ecommerce or digital transformation) and their ability to meet new IT delivery requirements quickly.

 

3.             Outsource to multiple suppliers
Spreading IT delivery across a number of carefully selected suppliers is actually not as crazy as it sounds; it is, perhaps, the most effective way an organisation can keep up with technological advances and the rate of consumer-led IT change.

 

Multi-sourcing to smaller suppliers provides organisations with a more flexible approach as well as increased speed-to-market. At the same time, the approach enables firms to share the risk, rather than outsourcing to a limited number of larger suppliers. Spreading IT delivery across a number of carefully-selected suppliers has seen many businesses reap the rewards of keeping up with technological advances and the rate of consumer-led IT change.

 

4.             Choose your supplier based on expertise
Companies should work with suppliers based on their skills, experience and expertise in specific areas and their ability to deliver in-line with the organisation’s IT delivery characteristics. For example, one insurance company that we work with has a large outsourcing deal for the majority of their software development but uses a specialist boutique for the development of the actuarial algorithms. We would suggest they take this to the next level and break down the key IT processes even further, outsourcing these to different suppliers based on expertise and specialisation.

 

5.             Ensure suppliers are on board with your business’ aims
A common IT belief is that by reducing the number of suppliers you immediately simplify things by having a single point of accountability, but in actual fact, there can be too much transference of accountability if relying on just one third party.

However, to mitigate the risk of misunderstandings and expectations not being met in the work process, establishing a joint framework for ways of working before the work actually begins is essential. The framework will provide guidance in a structured way that can be measured on a quality basis.

Delivering transformation is complex and for a partnership to work it has to be built on trust and co-operation.   There has to be a joint expectation of quality to be delivered within a certain timeframe and accountability set out from the start.

All parties should have a vested interest in making the partnership deliver a successful outcome. This is no different to engaging internal stakeholders too.  Immerse partners and stakeholders in what you are trying to achieve.  The essential aspect is for everyone to understand how sharing risk can be beneficial for all parties concerned. 

 

Ben Fry is Manager of Banking, Financial Services and Insurance at SQS UK

David Rigler is Director, UK Retail and Manufacturing at SQS UK

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