Outsourcers must speed up to meet growing demands



David Bicknell

E-business

If outsourcers want to keep their customers happy and competitive, they will need to offer a faster...



David Bicknell

E-business

If outsourcers want to keep their customers happy and competitive, they will need to offer a faster service to keep pace with the ever-increasing demands of new software

It wasn't so long ago that outsourcing was a must-do. In many cases, it was purely about cutting costs, and a debate ensued about how much strategic control you could - and should - give up.

Guess what - it's back again. Organisations trying to get to grips with e-business are beginning to find that they have to keep updating their systems to keep pace with a faster rollout of new software upgrades from IT suppliers - and some are finding their outsourcers are less than flexible in providing it.

It is clear that some organisations will have to turn to systems integrators and outsourcing specialists to provide the skills that they lack, but many questions remain about how attuned the outsourcing model is to the business needs of the fast-moving Net economy.

Just ask Hilton Hotels. Hilton recently needed to ramp up the scale of its systems to handle the special-rate promotions it ran with groups such as travel agent consortiums, large corporations and governments. These promotions are made available to Hilton hotels around the world, who can then choose whether to participate in them after customising them for local conditions.

As Hilton forecasted the growth of its hotel network to include around 1,400 properties from a recent acquisition, it was clear the current system would not be able to respond adequately to the promotional opportunities and the volume of responses expected.

In addition, one of Hilton's key staff found that to meet internal deadlines, he was suddenly having to consider developing in Java when he had no experience of using it. He had to resort to searching on the Web to meet a pressing need on which his usual suppliers could not deliver quickly enough.

Eventually Hilton deployed Versata tools to develop in six weeks its Hilton Information Database, a central collection of data on all company facilities, services, amenities, general information, and property description. That database is now driving a $1.4bn core business process.

The issue for many IT operations, one of Hilton's key developers admitted, is that had the company gone with what its existing developers were suggesting - and it could probably have lived with a six-month timeline - it would have missed out on gaining a competitive advantage.

Unfortunately, like most things e-business related, the tried-and-tested models formulated in the era of desktop systems may be found wanting. Outsourcers have many of the skills that users lack, but in future their service provision model may move from being analogous to a series of quick sprints, rather than a long jog.

I heard this week that one large multinational organisation, which shall remain nameless, has been reviewing the future of its five-year multi-million-dollar deal with Microsoft.

The company debated whether in future it should rely on Microsoft to develop Internet solutions, or whether other suppliers - Sun, Oracle, IBM - are better equipped.

Despite the much-trumpeted launch of Windows 2000, is Microsoft up to delivering enterprise solutions for the Internet age? Maybe the recently announced alliance with Andersen Consulting proves it feels as unsure as some of its customers.

For some organisations, the choice is going to come down to which shortcomings they can live with - Sun's Java confusion, Oracle's consultants, IBM's inability to get into e-procurement until its alliance with Ariba - or Microsoft's lack of real world enterprise savvy.

David Bicknell

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