Delivery & Sourcing

Many of the major trends occurring in the industry are related to technology delivery through alternative forms of outsourcing. Alternative delivery models are emerging. Software-as-a-service, hardware-as-a-service, storage-as-a-service and communications-as-a-service all have a familiar on-demand/pay-by-the-drink ring. Assessments here are especially critical to optimization, since these (and other) technology delivery models can save money and make money for organizations, if they are deployed prudently.

The delivery/outsourcing discussion begins with a core competency assessment which is both objective and political. What does the senior management team believe the company does well – and poorly? Is technology high on the list of competencies? Should it remain there?

Most everyone outsources some part of their business technology operation for all sorts of good – and occasionally bad – reasons. There’s a reason why the technology services industry is clipping along at over one billion dollars per day in the US alone. More and more companies have discovered the benefits of outsourcing compared to the recruitment and maintenance of large internal business technology staffs. In the early years, we all thought outsourcing was about saving money, but then we discovered the truth: outsourcing is not only about saving money, it’s about re-routing resources from non-core to core activities.

Delivery strategy is – when all’s said and done – about whether or not companies should build and maintain internal technology staff because they believe that personally controlling “technology” is essential to their success. All of the books, articles and seminars about core competencies are – in the final analysis – about shedding processes that companies no longer believe they can optimize or need to personally control. The core competencies drill is critically important to acquisition effectiveness. Companies have a number of options:

• Combine outside vendors with their own capabilities. Sometimes called in-sourcing or co-sourcing, this model can be very effective if structured and managed properly.
• Completely outsource segments of the technology mission, such as data center or call center management or customer relationship management (CRM), but keep others in-house; this option can also be effective, especially when there are clearly defined areas that companies do well and those that they do poorly – and when there’s no ambiguity about what’s core and what’s not.
• Completely outsource everything to vendors who come on-site and manage the business technology resources (including machines, networks, and people).
• Completely outsource everything to vendors who “rent” hardware, software, communications and services in “X-as-a-service” models.

 

Some delivery models can save money. While cost reduction is not always the reason to outsource, there are circumstances where 20% - 30% can be saved with the right sourcing strategy. There are also opportunities to make money by renting (proprietary and open source) customer-facing applications (like CRMs) and other technologies that can contribute to revenue growth and profitability. Finally, delivery discussions are almost always controversial so they must be handled delicately (and sometimes even confidentially).

We conduct core competency assessments, construct requests for proposals (RFPs), vet sourcing vendors and implement service level agreements (SLAs) for our clients who wish to outsource some or all of their technology requirements.

Oversight

These services help organizations with large scale projects, such as program and portfolio management. Often large enterprises launch important, sweeping applications, architecture, data base and other projects with major vendors and integration partners. Oversight is provided to clients to assure them that the right approaches and technologies are implemented in the most timely, cost-effective way possible.