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Has IT outsourcing gone "out of bounds"?

Has classic IT outsourcing gone "out of bounds"?


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John Boardman

Account Chief Technologist

Outsourcing has become something of a dirty word in the world of IT, and you don’t have to look far in the press to find all manner of horror stories and complaints about the very worst examples of the craft. Some have even claimed that outsourcing is dead. But is it? Well, maybe.

Seeing as some people would accuse certain outsourcing agreements of being signed in such a way that the executives can spend more time on the golf course, let’s head to the links to explain.

Outsourcing: Now a team sport

Back in the days of Jack Nicklaus and Seve Ballesteros, professional golf was largely a one-man operation, save perhaps for some sage advice from their caddy. Today’s golfers however, like Rory McIlroy, have a huge support team with them, from swing coaches to strength and conditioning coaches, nutritionists and many more.

This is something seen across elite sport as competition becomes fiercer and the spaces for differentiation become more specialised. As the enterprise has moved from IT being a support function to an all-encompassing utility across the value chain, outsourcing too has changed. It’s no longer enough to find a Jack (or Seve) of all trades, when the market has moved to a number of specialists.

Yet the move from single source to multi-source has its own disadvantages. I have often heard the phrase “one throat to choke” and this is certainly an advantage in the case of large outsource contracts. Having a single entity responsible for the end to end service makes life easier.

The move to managing multiple suppliers removes this. Multiple Supplier Management, especially with varying SLA’s, is not easy. However, this is where the mature outsourcers can shine. It makes sense for these organisations to offer a truly mature Service Integration and Management (SIAM) layer. They are, after all, used to managing multiple suppliers as it is very rare that all services are delivered directly via the outsourcer. The use of modern SIAM principles allows organisations to achieve the best of both worlds; simplified supplier management and accountability, combined with a matrix organisation of subject matter expert suppliers, in order to deliver and operate the outsourced services. These principles also spread further than what has traditionally been considered outsourcing. Through the proliferation of public cloud, particularly SaaS and PaaS service models, hybrid operational responsibilities are more common than ever. Managing service levels, quality, cost and integration are vital in the modern enterprise in order to successfully adopt and leverage new technologies and delivery models.

Service: Improvement over change

Whilst the technology landscape and IT demands are ever changing, good principles and good ideas remain just that. “Throwing the baby out with the bathwater” and abandoning all elements of outsourcing due to historic failings inevitably results in some beneficial elements being abandoned due to their associations. Resisting the endless appeal of novelty and modernity, and focusing instead on efficacy, value, and best fit, organisations can build on their successes and learn from their mistakes.

We all know that most traditional aspects of IT have never really gone away, whether it’s the mainframe, tape, or Novell. But we also know that the game is constantly changing. The “traditional” outsource may no longer be vogue, but the fundamental principles that made the traditional outsource appealing, and drive this new type of outsourcing, have not changed at all. What has changed is the formula for success and how it is delivered. This is true in business, technology, and yes, even golf.