IT Outsourcing should know nine items

IT Outsourcing What is the probability of failure or failure due to reference the definition of the doctrine is different from the odds may be different, but the company’s executives embarking on outsourcing projects, he must always remain sober, because just from a statistical perspective point of view, the possibility of project failure and the probability of success as large.
IT outsourcing projects frequently involve millions of dollars, companies often also hoped that by outsourcing the management and investment will bring change. Therefore, the implementation of a variety of approaches to address the various issues arising from outsourcing the process of paramount importance.
However, IT decision-makers in dealing with the whole process of outsourcing the project really need more than just the ability to prioritize better, but also the need to avoid risks. Problems and challenges arise because of their different forms in different stages. Project was carried out in 2023 after a disastrous problem may be in the contract or the transition phase is a small problem.
I propose the IT outsourcing buyers can take three-step method to maximize the value of their projects.
First, prevention. The problem occurs before the training to reduce risks, make adjustments to the organizational structure to ensure that outsourcing of contact in good condition.
The second is a rapid response. Make judgments on the issue of the use of early warning mechanism to identify the problem quickly, in the problem is not developed to solve the problem got out of hand before.
Third, re. If things are not smooth, to ensure that at any time can bring together the parties to explore the mechanism re-examine the original purposes, where it is needed to change or re-outsourcing relationship.
Phase of the signing of the contract
When re-adjust the correction IT outsourcing relationship, we found that the fundamental problem often lies in outsourcing the project itself. Outsourcing options (Outsourcing selection) are mainly from the perspective of finance companies and service providers, a tendency to neglect the real work only in the ink dried on the contract signed after the beginning this fact.
The contract itself may be the problem lies. If the contracting phase of the process toward a battle, then forced to give up their outsourcing service providers, interest and reasonable expected, outsourcing buyer may only give up the case of distribution areas of contention to win the price war. From the first day to start co-operation, service providers can only try to attempt to achieve the project did not win to break even, rather than benefit from outsourcing the project inside. Either way, the performance, nature and flexibility of the inevitable would be affected. More difficult to find the effect that the buyer will lose the outsourcing of innovation and continuous improvement of the important occasion, because they were distant from those from the core focus of the project was recovered.
When we evaluate those or implied or direct effect of outsourcing co-operation and co-expressed dissatisfaction with the company, we often find that outsourcing too many buyers to participate in the formulation of projects in the past has led to these problems.
Is there any good way to do Here are some basic rules that can help us to reduce the risk of these projects.
1, creating a win-win. Remember that all parties need to make money or save money. In the final analysis, to ensure higher quality of service is our ideal. Over the study can not create value, can only breed trouble, leading to falling profits. Cooperation must enable all parties involved, considering the economic, technological, political, management, geographic and other areas of the elements to find a suitable solution.
2, cooperation, earlier laid a good management infrastructure. In the signing phase, reflecting the long-term cooperation to develop an outline. You need is a self-renewal could be as much as possible the management of this kind of management built-in effective change management mechanism, which has the ability to contract terms change.
3, pay attention to cultural differences. Cultural differences in outsourcing the project agreement has been reached with regard to interference compared to comparable financial reasons. Signing stage is a good time, project-based goals to coordinate their cultural differences, development of management mechanisms to ensure the success of the parties. Therefore, the investigation of cultural differences worth the investment.
The challenges of the transition phase
The transitional stage of the success of the outsourcing is of utmost importance. In our experience, we encountered at least 23 outsourcing projects need to be adjusted or transition phase in the transition problems. Concerned about the outsourcing of many widely cancellation project, for example, Sears in 2005 with a computer technology company in outsourcing contracts signed when the suspension of less than a year worth 1.6 billion U.S. dollars to this project. This tells us that some outsourcing relationship when the transition has not gone bad.
During the transition phase in the end what kind of problems could affect the IT outsourcing deals often do, the buyer will be the implementation phase of the project very carefully, but not so carefully during the transition phase. Therefore, during the transition phase where not even determine the mechanism, let alone taken a step in the right. This means that some items at the beginning of when wrong, will eventually suspended after a series of failures, and there is no way to fix the problem.
Another reason for early failure of the transition phase requires specific skills and experience. At present, there are a lot of outsourcing projects on the market, but there is not enough to ensure the smooth conduct of outsourcing transition management experienced people.
The transition phase is also a loyal party workers from the outsourcing of the buyer to the service provider to change the time. No matter who to key employees to sign checks, outsourcing, the buyer would like to see that everyone will still do their best. Recently, a project implementation and maintenance of the buyer from the outsourcing to service providers, we started with a manufacturing enterprise cooperation. Until this point, our customers began to focus on how to properly consult with the service providers and statistics and management workflow mechanisms, including service level agreements (SLAs), goals. However, when one began to shift their outsourcing buyer’s control over those issues mentioned above have become irrelevant, and they are more concerned with who the service provider where he was a kind of role.
Here, we have some predict and solve problems during the transition phase approach.
1, once again focus on those Yaogen outsourcing service providers co-buyer and give them a re-training, which is very important. In most cases, remain in the service provider’s personnel are IT professionals, and their usual capacity as executor, in the service delivery is in charge of a very important technology management. Now they want a change and re-positioned as a manager, and his affiliated companies and service providers, liaison officer between the parties. Special training may be very necessary, so stay in the service provider staff will be a better experience and competence of his new role.
2, using the acceptance criteria. From the strategic level, the transitional phase is an important factor in the success is the use of acceptance criteria: the service provider what kind of goals to be achieved, in which day prior to the transition timetable is often impractical source of trouble. Outsourcing buyers and service providers will be judged by eye observation of the feasibility of this time frame.
3, choosing the right economic model of transition. Milestone-based economic model, based on the results of the economic model than the time-based economic model is better.
Business Continuity phase
IT outsourcing the management of paradox is too active consultations, followed by long-term partnership may be too passive in management. Service providers consistent concept is time for them to maximize the benefits provided by the commissioning of services. This allows a number of outsourcing from the buyer to withdraw their attention to outsourcing projects. However, the project still need to outsource their concerns, for example, to the closeness of the relationship between the two sides, nature and changes in circumstances, in order to detect when the change occurs.
As the IT market, complex and a major responsibility of IT executives, management tools allow us to avoid the enormous amount of project failure. The new online management tool can help a good outsourcing management, automatic generation of the best training, to make the best decisions, which would allow IT decision-makers a clear understanding and a large number of service providers the relationship between the timely adjustments can services provided.
Here are some adjustments to business continuity management structure needed means.
1, continued investment in management. Analysis of failed cases, such as IBM Global Services and outsourcing between the JP Morgan case, displayed in the management of investment failure is one of the reasons. Management includes not only the reporting mechanisms, decision-making mechanisms, but also to determine the health of the relationship between the two sides degree of outsourcing to ensure that early warning signals work, as well as the time needed to re-establish and maintain the relationship between the two sides.
2, do not stop. Is long and difficult contract stage. However, to benefit from the outsourcing relationship in the end farther. To ensure that everyone concerned about our goals, from the deployment of personnel to training are fully involved; ensure that every person in the transition phase and the smooth phase always paid attention to the management of the charter.
3, third-party participation. A third party as an advisory objects can be outsourced the implementation phase be a big help, at least as much to do contract stage. Because such a consultant can be an independent and objective observation of outsourcing relationship between the two and let both sides know that. In general, we find that simply make the project of mutual interest and cooperation between the project The initial goal is to make things back on track the most positive way.
The focus of value creation
Significance at the highest level, to avoid the failure of IT outsourcing the most important factor is to ensure that outsourcing buyers and service providers are concerned about the opportunity to create value, rather than just focus on price and cost. The value of outsourcing relationship is not measured by the contract, the value of marriage is not measured by the wedding.
We should remember this:
1, not only concerned about the timetable, is also concerned about the outcome of stage, which is a smooth transition through outsourcing is very important.
2, IT outsourcing management difficult. On this issue there is no good telling lies. To use all the tools to do things that can make you identify the best training, to ensure the smooth progress of the outsourcing relationship.
3, a two-sided coin, outsourcing, there are two sides to the cost side of outsourcing strategy, IT program is running is the other side of the ideal. If you’re staring at one side and ignore the other side will soon run into trouble.
Speaking of coins: IT outsourcing success without relying on a coin toss to see that it is counter to decide. Companies can outsource the whole process, concerned about the challenges, to promote the success of outsourcing.