PUBLICATION:  ITWEB
DATE:  11 DECEMBER 2006

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Outsourcing has evolved to become a new discipline based on deliverables and a proactive approach to business process management.

In so far as it is relevant to the ICT sector, outsourcing has undergone many years of adaptation and has now reached a level of maturity. The trend to outsource critical services and support shows no sign of abating, but businesses continue to engage the market using what is essentially outdated methodology.

There is a reluctance among decision-makers to take on the new outsource business model.

Outsourcing has really been through the development mill. It was initially established as a recognised market trend, was then modified to reflect popularity in ‘in-sourcing’, only to be transformed back to its original form.
Need for change

At present, the outsource business model represents a popular route for business to engage with service providers. However, the introduction of the revised business model has laid the foundation for a completely new level of interaction.

It is no longer accepted practice for service providers to just deploy representatives on site and complete functions/projects without any specific guaranteed outcomes. The old ‘bodyshop’ approach is outdated and cannot suffice.

Instead, the South African market follows the internationally established and recognised trend of soliciting the services of outsourced partners that demonstrate complete understanding of the deliverable or end result.

Service providers have to identify and remain focused exclusively on the core objective of their involvement and not merely on influences such as resources, people, time and requirements.

Towards partnership

The service provider’s role is to be an operational partner in the client’s business and not a transactional vendor. The outsourced partner cannot operate with the client at arm’s length – they must be incorporated and treated as a valued part of the business.
Hesitant
 
There is a reluctance among decision-makers to take on the new outsource business model.
The rationale behind this trend is that there could be major costs incurred because a partner is not focused on the deliverable. It is the pinnacle of any outsource-based services contract – without it the workflow and related processes cannot be clear and manageable. The result is often more problems and issues, and so-called ‘project-creeps’ (a trailing service with no specific outcomes and one plagued by challenges).

Essentially a client is only prepared to make an investment on the proviso that they gain a result.

With this in mind, many businesses have become service-conscious and the result is the adoption of a ‘co-source’ type services model. This is the term used to describe a situation in which a company combines its own HR and resources with the expertise, skills and technology know-how of the outsourced partner.

A new business model

The understanding is that the business then gains the benefit of the ‘best of both worlds’. This can and does work in theory and practice, but there is one particularly important aspect to consider: accountability.

Which party is more responsible for the eventual outcomes? Who is ultimately accountable for the quality of services, support and deadlines? Who has to step up to the plate and take ownership of what has happened – either negatively or positively?

These are pertinent questions that will influence the success of a co-source partnership agreement.

Managed services

One of the more powerful approaches to outsourcing has been in the construction and application of a managed service model. It provides a sound means through which the client can instantly secure the right service and measure the results.

It also serves as a constructive, productive method by which a service provider can maintain focus and instil discipline over operations. A managed services model usually involves a lot more than just illustrating capability within a few designated areas of interest. The model is a cost-effective and proactive means of engaging with clients to outsource or co-source particular and selected components of the environment.

A well constructed managed services model would incorporate a few key benefits including access to knowledge base, dedicated account manager, dedicated technical account manager, premium support rates and project co-ordination, among others.

Despite the higher levels of fluctuation and ongoing influence within this particular market space, there is every reason to believe outsourcing will continue to develop and remain an intrinsic and valued aspect of ICT trade.