IT outsourcing continues to be a popular option, as it offers a number of well-known benefits, including access to scarce skills, cost reductions, leveraging industry best practices and more.
However, despite spending considerable time and effort in implementing an outsourcing strategy, many organisations fail to leverage these benefits to their full extent, says Shailendra Singh, business director for Africa, Wipro.
The reality is that IT outsourcing represents a fundamental shift in the way the organisation does business, affecting many different areas. In order to ensure IT outsourcing delivers on the expected benefits, change management is an essential component, central to the success or otherwise of the initiative, and cannot be overlooked.
When it comes to implementing IT outsourcing, a large number of organisations treat the venture as a pure cost reduction exercise, and subsequently underestimate the changes this will cause for both IT teams and business users. A large proportion of the time and money involved in the IT outsourcing process is spent on finding the right outsourcing partner.
This often includes hiring consultants to act in an advisory capacity, identifying potential suppliers, evaluating responses to requests for proposals, conducting due diligence, researching the supplier, and negotiating the contracts. While this is of great importance, it is not where the IT outsourcing process ends.
Compared to the amount of time and effort spent on procuring services, the amount spent on considering the impact to users is minimal, which is typically where the challenge arises.
Once outsourcing initiatives are completed, business users need to adapt to the new processes, procedures and service management protocols.. This includes removal of long-established in-house IT support, as well as the introduction of self-help procedures. In addition, there is often a concern from business leaders that the outsourcing partner may not deliver what they need.
If these users are not brought into the IT outsourcing process from the start and reassured that their needs will be met, internal resistance to the new outsourcing initiative could cause hindrances to adoption and result in operational disruptions. For IT teams, outsourcing often changes their role or brings new roles and responsibilities, with new processes and tools that need to be understood and new relationships to develop with the outsourcing partner.
Without fully understanding the impact of IT outsourcing on all parties within an organisation, enterprises run the risk of creating an experience that fails to deliver the expected cost reductions and other benefits, and could put business leaders off implementing further outsourcing projects in future.
Change management is essential in ensuring the success of IT outsourcing. When planning an IT outsourcing initiative, it is therefore crucial to not only obtain the services of an IT specialist that will design an effective technology solution and processes, but also partner with change management experts. This will assist organisation to create a partnership between business users and business leaders with a clearly defined IT service vision and stipulated, agreed-upon criteria for success.
Change management experts can assist in a number of areas, including providing guidance and support to IT leaders in terms of predicting and addressing areas of internal resistance and barriers, and helping teams from different backgrounds collaborate as a single unit.
It is also important to analyse the impact of change across the organisation and define a targeted change plan, as well as to clearly define the new roles and responsibilities for internal IT teams. Change management can furthermore be used, to create internal change agents who will be able to effectively drive adoption within the organisation, and to set up processes that will ensure long-term sustainable success.
Outsourcing has the potential to significantly reduce costs while providing access to the latest technologies and global best practices, however many IT outsourcing projects have simply failed to deliver. This can largely be attributed to enterprises underestimating the impact of IT outsourcing on people throughout the organisation.
Ultimately, outsourcing is not simply another IT project, but a combination of IT projects and change management initiative that needs to be approached from the perspective of the business user. By approaching IT outsourcing in this manner, organisations can drive ownership and adoption of the new services model, ensuring long-term viability, for that important competitive edge.