Monday, August 15, 2022

Why outsourcing must change to solve today’s IT challenges

Can outsourcing be the cure to the skills shortage plaguing many organizations? A new ITWC report, “Agility at Scale” suggests that it’s time to reinvent outsourcing models to become more agile at addressing the current problems faced by IT leaders.

Rapid digital transformation over the last three years has changed the landscape, noted the panelists who discussed the report at a recent ITWC briefing. Organizations and their customers are more demanding on IT teams. Security threats are skyrocketing, and the workforce has changed dramatically.

“I’ve never seen a talent crunch like we have today,” said Corey Cox, Senior VP with Tandet Group. “The need for a more diverse talent set is getting bigger and yet there are fewer of them available. We absolutely have to be able to find third parties that can help us bridge these gaps.”

To do that, outsourcers need to be more innovative, said Brendan O’Brien, Chief Technology Officer with Meta IT. “We have to use our experience and look at what the customer needs at the moment. It’s not about the buzzwords, but how you can get a return on investment.”

View on-demand: “Delivering value in the face of resource challenges”

These outsourcing practices need updating

The panelists all believed that outsourcing could help organizations scale quickly and become more agile. However, to achieve that, they said three common practices must change:

An “us and them” mentality. There’s a difference between how organizations treat their own employees versus the outsourcer’s employees, said Gary Tamber, Director of Information Technology at Notified. For example, he noted that the outsourced employees are often not invited to meetings. “We want to create a culture that has a one team mentality, and everyone has a common goal,” Tamber said.

A waterfall approach to outsourcing. It takes too long to go through all the stages to define the project and to get through the negotiation before any work begins, said Cox.  “It takes a lot of mental energy to go through all of these hoops,” he said.

The “bait and switch.” The panelists noted that sometimes the outsourcing team you saw during pre-sales talks is not the team you get after you signed. Similarly, Cox added that outsourcing companies shouldn’t accept additional projects that are not within their area of expertise.

How to do outsourcing differently

It’s important to have a cultural fit with the outsourced team, said Marcello Bosio, Head of Digital Business, Meta IT. “We try to make sure that all the parts are connected right from the beginning, including the technical and business sides,” said Bosio. “We have to understand the strategy and their culture.”

New approaches can reduce the pre-sales process, said O’Brien. “We set up a contract for a digital squad,” he said. “There is still a process, but we go through it only once. It improves agility because the client ends up with a contract almost like a bucket that you can take out what you need over time.” O’Brien added that if organizations know their needs in advance, he can find the right talent or train someone for the project.

The “bait and switch” isn’t acceptable said Bosio. To help protect themselves, organizations should make sure that the person they’re talking to during the acquisition phase is actually the delivery person, he advised. O’Brien added that it’s a good idea to ask for references. “Look for partners that are doing more than just talking,” he said.  “Look for partners that are genuinely delivering success and have customers that are proud to talk about them.”

Several of the panelists said that the future of agile partnerships will be to work with specialists and not just the large firms. “They can’t be experts in everything,” said O’Brien.

In the end, Cox said that he likes partners that ask the right questions. “When they ask why I want to do things a certain way or propose other ideas, that’s where the value starts.” Obrien agreed. “It’s called an outsourcing partnership because it’s about building a true partnership,” he said.

View on-demand: “Delivering value in the face of resource challenges”

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Jim Love, Chief Content Officer, IT World Canada

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Cindy Baker
Cindy Baker
Cindy Baker has over 20 years of experience in IT-related fields in the public and private sectors, as a lawyer and strategic advisor. She is a former broadcast journalist, currently working as a consultant, freelance writer and editor.

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