In a sliding market, outsourcing looks increasingly attractive. In this era of drastic cost cutting and budget squeezing, many IT managers facing diminished budgets and frozen in-house resources are exploring ways of sending even more work off site to save money, or at least take capital costs off their immediate plate.
But with traditional outsourcing opportunities all but played out, many enterprises appear hesitant to outsource and are hesitant asking, “Is there anything left to outsource?”
Four critical IT tasks — project management, e-discovery, regulatory compliance, and environmental activities — are all ripe for outsourcing. But today, they are generally not outsourced because managers don’t think they can send the work off site due to cost, security, and other concerns. It’s time to rethink the anxieties in these four areas.
No. 1: Project management
Project management involves organizing and balancing three basic elements: people, time, and money. Many IT shops would like to unload the nuts and bolts of IT project management onto an outside provider, but worry that the task is simply too big, too complex, and perhaps even too important to outsource. Managers also fret about losing the precise control and oversight successful project management requires, as well as the ability to turn on a dime if circumstances demand a sudden change in tactics.
Beth Anderson, IT supervisor for Santa Fe Natural Tobacco Co., a specialty tobacco and cigarette manufacturer, overcame her reluctance to outsourcing project management after discussing her reservations with SMBology, a firm that handles project management. After some discussions, the partners decided on a staged approach. “We’ve given them some technical project management responsibility for a couple of major projects,” she says.
“So it is significant … but it’s not like we’ve outsourced all project management.” A current project aims to add mobility functionality to a Microsoft Dynamics CRM platform.
Regardless of an outsourcing project’s scale or scope, Anderson believes that it’s vital for the provider to maintain a physical connection with its client. “[SMBology] is physically here to gather requirements and … when we’re doing user testing, so we’ve got real quick communications,” she notes. “If the user sees something that’s not working the way they want it to, then the people are here to fix it.”
Justin Singer, SMBology’s president, says that many IT shops are reluctant to embrace project management outsourcing because they were soured by previous on-site project management experiences. “They may not have experience with what a really good project can look like,” he explains. “It’s hard for them to really see what the benefits are going to be.”
Anderson says outsourcing benefits have generally met her expectations. “You get elastic access to talent, and you get specialized skills that you don’t have a need for 365 days a year on your own internal team,” she says. “So you can ramp up and stretch the elastic when you need the resources, and then you can snap it back when you no longer need them.”
Outsourcing opportunity No. 2: Electronic discovery
Over the years, e-discovery (sifting through data pertaining to criminal or civil legal cases) has grown into a burdensome task for IT shops working inside law firms or enterprises with corporate legal departments. It would be nice if some or all the responsibility for storing and managing theses important documents could be offloaded onto an outside service provider. Yet IT managers often feel that privacy and security issues, as well as user access limitations, make the effective outsourcing of e-discovery material difficult, if not impossible.
But Seth Row, an associate at law firm Holland & Knight, sees it differently. “There are some things I wish we could do more of in-house, but given the current realities, it’s not possible,” he says.
That’s why, like a growing number of IT shops in a similar situation, Holland & Knight is outsourcing much of its e-discovery work. “It’s good to have options,” Row says. “You need to be prepared for lots of different contingencies, so developing relationships with vendors is very important — it’s important that they’re there as a resource.” Row notes that a growing number of legal cases focus on e-mail evidence. “E-mail is usually the largest volume of electronic data that you’re dealing with in a lawsuit, particularly in an employment-related lawsuit,” Row observes.
But Row notes that it’s virtually impossible to search e-mail effectively in its native client environment. “That doesn’t work very well, so it’s got to be processed into a database before you can search it across the different fields,” he explains. “It’s got to get processed so that I can search all the e-mails and all the associated attachments that contain a particular word, or a particular concept.”
Although an IT shop could tie up its servers running lengthy databases searches, and then organize and store vast amounts of e-mails and documents, it’s often more cost effective to outsource e-discovery projects. Holland & Knight uses the eClaris e-discovery consultancy to handle much of its work. “eClaris has the capability of setting up the database for me, and I would then access it through the Internet,” Row says. “So I go to a Web site — it’s password protected — I log in, and then I can review [the data] through this Web-based system.”
While the Web interface addresses IT managers’ user access concerns, what about privacy and security issues? Education is the key to calming managers’ fears, says Jacques Nack Ngue, eClaris’ CEO. “One effort we do is engaging companies, and just providing as much information as possible about the e-discovery process,” Nack Ngue says, such as “what the risks are, how to assess them, and how to handle and manage those risks.” Row agrees that once a manager begins working with an outsourcer and understands what needs to be done to maintain security and privacy, the risks suddenly appear much smaller. “It’s a collaborative process,” he says.
Outsourcing opportunity No. 3: Regulatory compliance
The financial scandals of the late 1990s and early 2000s led to several new federal compliance mandates, most notably the Sarbanes-Oxley law. These mandates, as well as an array of other state, local, and industry-based compliance measures such as California’s privacy breach notification statute and the payment industry’s PCI standard, created new record-keeping, document-tracking, and other demands on IT shops that tend to sap productivity and slow other critical work.
Despite the added IT burden, many enterprises have been reluctant to outsource regulatory compliance tasks, believing that the work is too business-critical to place into the hands of an outsider. Many managers a