Making IT Outsourcing Work - Series #2

Making IT Outsourcing Work - Series #2

Finding the Right Partner

In this series of Blog posts we're looking at what makes IT Outsourcing work. In the last article we discussed what changes the customer needs to consider to make Outsourcing a success - in this one we're going to take a brief look at some simple but important things a client should do to find their outsourcing partner.

 

Understand your Requirements

Sonny SehgalBefore you can do anything you must engage with your business to get an understanding of your requirements, and also be prepared to challenge the validity of each requirement... you'd be amazed how often we're engaged by prospective clients to provide services and they've no idea what sort of services and/or service levels they really require.

As an example, let's assume that you’re outsourcing your entire IT support operation for the first time... you're contracting a 3rd party in to look after your infrastructure and applications - previously they've been supported by internal staff who cover a lot of ground and do their best.  Out of hours support has historically been provided informally with an engineer on call... they rarely get the call, but when their phone does go off in the middle of the night they can be roused out of bed and get to work to fix the problem.

To a degree this provides a 24x7x365 level of service which the business has come to expect. So you pass this requirement on to your potential new providers during the tendering/evaluation stage and are surprised when you receive back a big cost. Why?

Because in addition to the 24x7x365 service hours that you've asked for, the Service Provider has also asked what levels of Availability each of the applications require... and because no-one in the business wants to say that their application is anything less than critical the response has uniformly been "I can't live without it for more than a few minutes".

So now the Service Provider is faced with designing a service, which will be underpinned by a contract which contains credits due back to the customer in the event that Service Levels are not fulfilled, which must provide highly-available services on a 24x7x365 basis. This understandably comes at a premium price.

To get to the right requirements is an investment in time by the client, but it is crucial in arriving at the correct specification before going out to market.  Unless they have the in-house expertise, in our experience (to do this properly) often the client needs support from external consultants well versed in the ITIL "Service Strategy" and "Service Design" processes to lead the exercise and challenge the business to define the appropriate requirements and service model.

 

Engage with the right Partners in the Market

 

More often than not, corporate governance insists that some form of competitive process takes place when procuring services - and when it's something as important as outsourcing your IT our advice would be to take a good look at the market to see what's available and who you might want to work with... however in today's "as-a-service" world there are so many players in the market it’s hard to work out who does what and so finding the right ones to engage with can be a challenge.

You've probably already got an IT supplier that can do at least some of what you want, but do they have all of the capabilities you need? And you've probably heard of some of the main players... but are they right for you?

You ideally want to start with a fairly long list of potential partners and whittle them down without too much effort or involvement on either your or the potential provider's part to get to a shortlist of between 3 to 5 to actively engage with.

There are many ways that you can find the potential partners for your long-list.  Internet searches, referrals, trade shows, external consultant support... they're all valid approaches.

The key thing is to think of what's important to you, not only in terms of meeting your requirements but also (crucially) in terms of "fit" with your organisation, so that when you've got your long-list together you can easily eliminate those who won't work and hone in on those who've got the potential to be your partner.  At this stage, some vital considerations tend to be:

  • Capability & Credibility - can the Service Provider meet all of your core needs, do they have the required technical and quality certifications (vendor partnerships, accreditations, ITIL, ISO, etc.) and are they prepared to provide references of customers within your sector that they currently work with?
  • Size & Scale - how many staff do they have in the service areas you need and where would you rank in terms of customer-size? There’s no point you being the smallest customer they've got as you won't get the focus you deserve... but equally there's a big risk if you're by far their biggest customer.
  • Location & Languages - where are your offices and users based and how does that map to the Service Provider? Are there specific languages/ time-zones you need supporting and how would that be accommodated? Where is the Service Provider's Service Desk located and is language going to be an issue?

Without too much effort you can draft a number of quick questions along these lines and conduct telephone interviews with providers on your long-list - and then quickly rule out those which are least suitable to work with.

Believe me, a Service Provider will thank you and be happy to be ruled out if there is no chance of winning the business... going through a full tendering process is time consuming and expensive for us and so we only want to do that if we're sure that we've got a chance of winning. If we’re not the right fit, let’s get to that conclusion with the least amount of effort all round!

 

Run a Collaborative Tender/ Evaluation Process

 

Finally, when you get to your short-list, it's best to work closely with your short-listed potential partners to help ensure they really understand your requirements and that they help shape the "invitation to tender" that they'll respond to.

Run briefing sessions with each individually to discuss the requirements and approach; letting the Service Provider challenge the requirements and ask the difficult questions - remember they have a wealth of experience in delivering what you want, so it makes sense to listen to them before writing up the ITT... they’ll tell you the vital information that they need when constructing their response and so letting them get close at this stage cuts down both on questions later and the potential for rework.

Also, letting them understand more about your business and existing environment helps ensure they put forward the right solution in their bids - the more they know about you the more likely you are to get a quality response.

I hope you've found this article helpful - in our many years of experience we've found clients who've embarked on the outsourcing journey along these lines have enjoyed more success than those who didn't. If you would like to discuss how you might go about this, feel free to drop me an email, add a comment on the blog page or just pick up the phone and give me a call... we're always happy to help!

 

Sonny Sehgal

Chief Executive Officer (CEO) at Transputec Ltd.

 

Making IT Outsourcing Work – Series #3
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