John Turner, Director, independent IT and business change professional services firm Xceed Group, explains why an investment in training can help organisations to get the most out of their outsourcing deals.
As the double-dip recession continues, and the uncertainty caused by financial crisis in Europe takes hold, there’s no doubt that UK organisations will be looking to outsource more and more over the coming months. The promise of increased efficiency, lower costs and working with subject matter experts mean that, for some businesses wanting to streamline their operations, outsourcing seems to be the only answer. But how many know what it takes to turn the promises into the reality of a successful outsourcing relationship?
After all, with the number of outsourcing deals on the increase across Britain and mainland Europe, it’s also noticeable that the number of failed outsourcing relationships has risen sharply. One of the principal reasons for this is that very few businesses seem to grasp that fact that all relationships – whether it’s a friendship, a marriage or an IT outsourcing engagement – need careful attention. Why do organisations think that good managers of internal departments will be good at managing complex outsourcing arrangements and relationships with third parties? The chances of achieving outsourcing success can increase exponentially with the support of a dedicated training programme.
There are a number of benefits that training can provide when it comes to managing an outsourcing engagement, but perhaps the most important of these is that it can help end-user organisations to identify the right service partner for them. Like any business, IT outsourcing suppliers come in all shapes and sizes, but that doesn’t mean that they’ll all be a good fit for any organisation with an IT outsourcing need. Also organisations need to be realistic about the promises being made and what they think will be achievable. A key failure in all outsourcing deals is the one of over promising and under delivering. By training decision makers to look for a supplier that is a good fit, both in terms of culture and relevant expertise, organisations will be able to encourage a more collaborative and successful relationship. This will allow them to discuss problems openly and identify practical solutions before the issue gets out of hand.
Of course, another way of ensuring that the vendor/supplier relationship is a success is to train those in charge of agreeing service level agreements (SLAs). This will ensure that they are not only realistic, but that they also provide an accurate picture of what success looks like. Too many outsourcing deals fail because the lines of communication have been blurred, with neither side gaining a clear understanding of what is needed on their part. By ensuring that end-users define success in their SLAs from the outset, both parties should be in a better position to achieve results and flag any problems at an early stage.
Clearly, any investment in training programmes aimed at improving management of external parties should be carefully scrutinised at a corporate level. However, it’s also important to remember that the potential savings provided by a successful outsourcing engagement could mean that that not only is ROI is achieved relatively quickly, but that overall costs are lowered as a direct result. Conversely a badly managed engagement will lead to inefficiencies, higher costs and a very acrimonious relationship!
