Successful outsourcing starts with clear company aims and
an understanding of how outsourcing can help you meet those aims,
according to BCS professional member Elizabeth Sparrow, a
consultant and author of two books on the topic.
"First, know your objectives," she said. "Make sure you identify
what your organisation wants to achieve and how it will know it has
met these aims. These objectives will determine how you structure
and manage the project, what functions are outsourced, how you
evaluate suppliers and what type of relationship you have with the
service provider.
"Understand each person's perspective. Outsourcing touches the
lives of many people in your organisation. Although a decision to
outsource might have been taken, this does not mean that everyone
will share the same objectives. Once you have identified and
understood their views, you can begin to create a shared
agenda.
"Communication is a key element in any outsourcing project.
Outsourcing introduces a whole new set of roles and
responsibilities and these can produce uncertainty, doubt and fear
and can lead to confusion.
"You need to issue regular progress reports through different media
aimed at all those affected. Use management brief-ings, videos,
newsletters, posters, the intranet and enquiry points."
Once the objectives have been examined, it is important to
understand the different approaches to outsourcing, Sparrow said.
These include:
Selective: specific functions are outsourced with
many services remaining in-house
Tactical: often short-term and applied to specific
projects
Strategic: a longer-term relationship in which
both parties invest to develop a partnership approach
Transitional: used for major change such as an IT
infrastructure upgrade. The supplier might manage legacy systems
and the in-house team will focus on new technology
Business process outsourcing: the entire business
process, including IT
A joint venture: with a supplier and its own
management team
Benefit-based outsourcing: both parties invest in
IT service development and share the benefits and risks as they
accrue
Offshore outsourcing: IT work transferred
overseas.
The range of approaches means a supplier should not be chosen on
price alone, Sparrow said. "The evaluation of proposals should
include potential for developing a productive relationship; the
quality of the proposed solution; a risk assessment; payment
mechanisms; direct and indirect costs; benefits; and people
issues.
"Be sure that the supplier is motivated and capable of providing
the services your organisation needs. The contract should
unambiguously specify the scope of the activities to be outsourced,
the roles and responsibilities of the customer and supplier,
dispute resolution procedures, remedies, targets and performance
measures.
Once the new relationship starts, it is important to have the staff
to manage it, Sparrow said.
"You will need a team to monitor compliance, liaise regularly with
the supplier, negotiate charges for new or changed services,
monitor the total value of the deal and review delivery against
overall objectives.
"Contract management is a distinct role in the IT department, but
not every IT professional will be well suited to it. Identify the
team and provide any necessary training in good time."
Successful IT Outsourcing was published by Springer last year;
Sparrow's second book, A Guide to Global Sourcing, will be
published by the BCS this year. Sparrow also chairs a BCS working
party on the impact of offshore outsourcing