Outsourcing or nearshoring IT experts can be commonplace for some companies. These companies will likely understand both the business and technical benefits that outsourcing teams can bring to a project or organisation. As more businesses become driven by technology, demand for skilled IT workers will continue to grow in 2018, driving more companies to turn to outsourcing IT roles.
Mary Lacity’s and Leslie Willcocks’ joint research in progressive outsourcing approaches has helped companies navigating modern outsourcing for over two decades.
The rise of Robotic Process Automation (RPA) is nothing short of spectacular. It has captivated the attention of digital operations executives with the promise of cost-savings beyond labor arbitrage, cost avoidance by extending the life of legacy IT, quicker implementation than traditional IT projects, business-user friendliness, auditability and compliance, straight through processing, and let’s be honest – terrific marketing.
Whether you crossed the automation chasm early, or are just starting your journey into digital service delivery, you’re not alone if you’ve got questions surrounding technical ecosystem choices. Generating ROI—and how exactly to go about proving the value of numerous small automation projects versus one giant re-platforming initiative—is a common challenge.
Open vs. Closed Ecosystems
When the Internet arrived, we said, “The world is no longer flat! This changes everything!” Then we went back to building centralized systems – something we still do today. Examples of centralized systems are our ERPs, enterprise payment systems and government platforms. Recent commercial examples include Google, Facebook and Uber.
Making the switch to outsourced strategic procurement is not as simple as handing tasks and responsibilities to a third party. It requires wholesale change that starts from within. Someone in procurement needs to lead that change, and it may or may not be the CPO. What procurement needs to do is to find the catalysts in their midst.
When a function or even a full department is outsourced to a managed service provider (MSP), the scope of work, requirements and service needs can at times be hard to nail down, especially as the relationship with the MSP evolves over time and the needs of the business evolve. This is particularly true in the case of IT Managed Services – an area with frequent need for outsourcing due to resource constraints and/or technical expertise and an area where it is critical that services continue uninterrupted.
Nobel laureate Richard Thaler understands the “human” side of economics. He’s a founding member of behavioral economics and most recently won the 2017 Nobel Prize in Economics Sciences.
2018 is not the first time our industry has come under fire. It’s had a colourful history from tales of cost-cutting to ethical arguments around driving labour arbitrage. Outsourcing has often been misunderstood and the whole industry blamed when things go wrong. But with the recent, spectacular collapse of Carillion we are seeing a renewed attack from certain corners in relation to the “failure of outsourcing.” A grand, sweeping statement, but is there any truth in it?
Outsourcing decisions often come down to a relatively simple cost-driven Return on Investment (ROI) calculation: how much will the cost change in each scenario and how quickly can that investment be recovered?
On the surface, this purely economic approach seems appropriate enough. After all, economics are certainly important. But over-reliance on purely financial-driven outsourcing decisions is one of the biggest causes of the “strategy-to-execution gap,” namely the distance between a company’s business strategies and its ability to execute on them.