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Governance builds innovation bridges

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The concept of outsourcing part of an organisation’s IT business functions to an external service provider has changed somewhat during the past decade. From merely getting things done simpler, faster, better these relationships have evolved to outsourcing partners delivering innovation and value-add that assists clients to improve their business. The question customers are asking now is: What can you do for me tomorrow; not just today?

According to Lester van Graan, outsourcing business development manager at HP South Africa, all the fears of outsourcing can be overcome and turned into positives through properly structured and managed outsourcing relationships. Key, however, is to partner with a provider that meets a company’s short- and long-term expectations and objectives and can do more than simply the work stipulated in the contract or service level agreement.
The new outsourcing relationship is built on trust, partnering values and a knowledge that the service provider truly cares for a customer’s business and its future profitability.
Says Van Graan: “Desired outcomes from dynamic, complex information technology outsourcing (ITO), business process outsourcing (BPO) and business transformational outsourcing (BTO) initiatives require a deeper relationship between a provider and its client. Unless the parties trust each other and are willing to work together in a manner that achieves mutually beneficial outcomes, one or both will become dissatisfied.”
Don’t rush into a decision to outsource, think it through carefully. Most IT outsourcing decisions – like all strategic business decisions – tend to follow a series of decision and engagement phases. There are a number of recommendations available on how to do this, but they all tend to follow these steps:
* Make the decision to outsource your IT environment: This is generally an internal assessment and an organisation would typically decide upon the various business objectives it must attain by outsourcing its IT and the potential extra benefits it needs to extract from the outsourcing relationship – if sound business reasons for outsourcing IT cannot be found, keep it inhouse.
* Prepare your organisation for IT outsourcing: Carefully choose your team and ensure they are aligned to the corporate objectives influencing you to outsource IT. Remember that outsourcing your IT is a fundamental business oriented, strategic decision – ensure the appropriate emphasis is placed on it as you would for any major business decision taken by your company. “An IT outsourcing decision could well be the catalyst to expedite your future IT and business state,” notes Van Graan. It is imperative that you match the role of IT to the business’s and board’s expectations to ensure alignment.
* Select your IT outsourcing supplier: “According to The Black Book of Outsourcing you would have to be methodical, disciplined and focused during this selection process. It is a time consuming and resource intensive process and according to them not fully completing it is a major reason why outsourcing relationships fail,” says van Graan. He further echoes the words of Patrick Kelly in his 2005 article “The 10 things to consider when choosing an outsourced vendor", that the right outsourcing partner will work with your company’s specific needs and execute your unique solution.
* Manage your outsourcing vendor: This is probably the most important step in ensuring the partnership succeeds. The lack of governance or the adequate management of the contract is a key contributor to failed outsourcing deals. Adds Van Graan: “Over and above the basics of delivering outsourcing services to the contractual expectations, governance can be seen as the glue that brings every aspect of the outsourcing relationship together.” Key to note is that as in any relationship, IT outsourcing will require the efforts of both entities to make it successful.
"In designing its IT outsourcing engagement process and methodology, HP has taken into account these complexities and buying phases normally associated with an IT outsourcing decision. It considers the differences and the unique processes each company will adopt to cater for its own set of requirements. Our approach to IT outsourcing is to look at technology and business holistically”
“We look at your business and associated IT requirements and design an outsourcing solution that enables more of your IT investment to go toward innovation instead of maintenance. We also ensure our IT outsourcing solutions will help accelerate customers’ business growth and, in general, better meet their overall needs. We believe we have a fresh and innovative approach to this often complex subject,” Van Graan concludes.