Collection of outsourcing fallacies
Disputes about the advantages and disadvantages of outsourcing, as a rule, are dominated by three poles of opinion - business, CIO or IT department and outsourcing service provider. Curiosity of the situation lies in the fact that they are all right. But that is not the question, but which point of reference to choose at a given time based on the company's external and internal priorities.
The position of the outsourcing provider is clear and simple, he needs to sell as much as possible and expand the list of services provided as the relationship with the client develops.
It is believed that it is from the CIO that the most distrust of outsourcing comes. His typical position is quite understandable: I must have my own team with which I can carry out all the tasks set by the management. And the more this team, the more effective the IT work, the greater the responsibility of the CIO and the steeper its position among colleagues, the more money passes through his hands and settles in the bonus fund. About how this position is correct, to judge the investor or business leader.
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Many CIOs are ready to outsource only unique functions, whose list is extremely limited. The remaining tasks, they believe, should remain within the company and be solved by its IT department. But this position conflicts with the point of view of investors and CEOs who care about the efficiency of companies. To achieve efficiency, including the use of IT, is quite difficult if you concentrate everything inside.
For example, how to ensure any competence in 24 * 7 mode? It seems that you can do 3 specialists. And if the IT service is responsible in the framework of a hard SLA? Then you need a shift on duty, and this is already at least 5 people. How to organize and use them in real work is the art of managing the CIO.
By and large, the task of CIO is to ensure the effectiveness of the automation of the company's processes. However, the IT service does not always correctly understand its tasks. And here a situation arises that is becoming more and more common: integrators go to the business through the head of IT and quickly agree with it, arguing their proposals from the standpoint of efficiency.
In fact, without taking into account the requirements of the CIO, no outsourcing project can be successfully implemented. It is necessary to make sure that the person responsible for the project is interested in its implementation, its growth within the company and receiving a bonus for the work done. But this is more the case in theory. But in practice, in one company there can be several customers, and each pursues its own interests, which do not always ideally coincide. And in search of a compromise, it is often necessary to participate in the affairs of the company of the integrator, whose superposition often provides a positive result.
In addition, we finally come to the understanding that without the approval and understanding of the business it is extremely difficult to implement large outsourcing projects. Their fate, in fact, depends on the business, since it is the business that allocates funds and is responsible for them.
In fairness, we note that the above and other possible arguments in favor of and against outsourcing models are not new. At the same time, large-scale changes are taking place around us, which in one way or another influence the priorities of the business and its attitude to outsourcing.
On the one hand, companies have become more mature, and on the other hand, new personnel from generation Y, which has grown with devices in their hands, have begun to enter the corporate environment (IT and business). The representatives of this generation have their own view on many things (for example, on state regulation), which seems unthinkable for the older generation of managers.
This is easily illustrated by an eloquent example of database management. To support them, you can keep expensive staff or transfer the appropriate competence to outsourcing at reasonable prices - and it is more convenient and more profitable.
Any disputes about outsourcing practices can be conducted to infinity, which, in fact, occurs since their inception. The most frequently heard argument is “for”, according to which outsourcing is cheaper. But perhaps the main thesis of supporters of outsourcing in recent years has been the following: it’s not cheap but the fact that outsourcing allows you to manage the price / quality ratio.
This makes it possible to structure IT services in such a way that you begin to understand their real value. Accordingly, then you can choose what you directly need, and either reduce the cost to the detriment of quality (while continuing to clearly assess the level of quality), or vice versa, raise the level of quality by increasing the cost.
In order to fix the level of quality, you will have to incur initial costs. But in the future it may be possible to reduce the cost of consumed IT services by a few percent per year - by honing IT processes and increasing their efficiency.
As for the arguments against ... Over the years of outsourcing practice, a whole collection of misconceptions has been formed (they were vigorously discussed in the outsourcing section at InfoSecurity Russia 2014), which we would like to break into “thematic” blocks and comment on them.
"Outsourcers are not responsible for the system with the head, but only within the framework of the SLA." For small companies, this is probably true. But for large ones, no. As a rule, the experience of an outsourcer can be assessed by the thickness of its SLA, and for large companies, typical SLAs reach 80–100 pages, where only the first 2 points represent the basic conditions, and all the rest - the very “if”. So, the statement about the irresponsibility of companies is simply incorrect.
"There is no specific person who owns all the information and is responsible for the system." This is also not entirely correct statement. If a key specialist is not in place, he is sick, he is lured away, what will happen to the system for which he was responsible? Will it collapse?
The absence of such a specialist is not a minus at all, but rather the risk of the customer: he is dependent on the person who has locked the system on himself. At the same time, an outsourcer on large contracts always has a dedicated manager and a separate team for the customer.
"Outsourcers can see too much when working with the system." Can So what? This statement in itself is not consistent, at least for the reason that the employees of your company can see exactly the same with the same probability. So, inflating the risk of losing confidential information through external companies is not quite correct. If the IB service has correctly organized and delimited access to information, such information can be transferred to the outsourcing partner, while retaining control over its condition.
"On the outsourcer side, data can be stolen / distorted." They can certainly steal! However, as the employees of your company. To distort is extremely unlikely, as the outsource provider is responsible for the services provided to you within the framework of the very same SLA that everyone likes to talk about.
"It is impossible to control the work." Here again the question arises of the maturity of the company's processes. If your internal employees are able to control the perimeter and the work being done, you should have no problems with external ones. Saying “we’ve given everything to outsourcing” and losing control is absolutely wrong. There should always be an internal manager who controls the contract and checks the correctness of its performance on the basis of the expected economic results that affect the performance of the business as a whole. If the results do not meet the expectations, this is a reason to analyze the situation and certain conclusions.
"Own employees will figure out everything faster and really do things." When something happens for you, everyone runs, rustles, something happens. And the outsourcer has 15 minutes gone - nothing, 20 minutes gone - nothing ... So Does he do something or not? "And you did not think that when the manager leaves the office for an external meeting or goes on vacation, does the external activity of the division change? It is possible that all this running around is nothing more than an imitation of turbulent activities. An outsourcer can also show you how its employees can They can even upload videos to YouTube or transfer camera recordings to you.However, only the response to the incidents is important, and it depends on the work of the customer’s manager, on how the communications are built.With a properly constructed communication, you will not have time to notice the incident as you will receive SMS: "There was an incident. Already corrected!".
"To control only SLA is ineffective, it is impossible to take everything into account." What can be controlled can be outsourced. That which cannot be controlled cannot be transferred - it is better to leave it to your own team until the control becomes simple and clear. Or maybe suggest to an outsourcer to make this question transparent? After all, the topic of control is also relevant for your own team. Even perhaps more so.
"Outsourcers do not know the inner kitchen." The problem will disappear instantly as soon as the internal kitchen is described within the SLA. If you cannot describe it, then we must honestly admit that the problem is not connected with the outsourcer: the company itself is simply not ready to outsource and optimize IT efficiency. In this case, outsourcing will not initially be effective. In companies with a high level of maturity, all the features of domestic kitchens fall into the regulations and procedures.
“An outsourcer builds all processes for himself, and the customer becomes addicted for life”. From the point of view of the outsourcing provider, this is normal. In marketing, they even came up with the appropriate term - “swaddle the client”. But the client is not a helpless doll, and has the right to make his final choice on his own.
There is another term - “Transition period” - time (and money) for which an outsourcer can intercept work from another contractor. As a rule, processes and SLA are not built for a specific outsourcer, but so that there are always two or three partner companies that are ready to meet the same requirements, you just need to remember the advantages of competition.
“You can deal with your staff much faster (by concepts) than with an outsourcer (under an agreement).” Right. But only if the customer can really quickly deal with his own employees, having a wide range of interventions in his sleeve. However, in practice, for some reason, this is not the case. “The highest measure” - dismissal - not only does not help “disassembly”, but also creates additional problems in hiring a new employee. In the case of an outsourcing contract, this is a partner problem.
Perhaps over the years of practice, two truths have become the main rules of outsourcing.
The first is that outsourcing is not expensive or cheap; it is effective or inefficient. If it is ineffective, why is it needed! And if it is effective, and it is justified and proven to the shareholders of the customer, the money for it, as a rule, is much easier than for dubious projects.
The second is that risks in outsourcing do not disappear anywhere, they are simply replaced by others. The risk associated with its own staff goes away, but there is another one related to the monitoring of partner competencies and regulations within the framework of the SLA. IT risks, like other risks, need to be managed. And life according to SLA is an art that needs to be learned, and experience comes only with practice!
Triangle of opinions
The position of the outsourcing provider is clear and simple, he needs to sell as much as possible and expand the list of services provided as the relationship with the client develops.
It is believed that it is from the CIO that the most distrust of outsourcing comes. His typical position is quite understandable: I must have my own team with which I can carry out all the tasks set by the management. And the more this team, the more effective the IT work, the greater the responsibility of the CIO and the steeper its position among colleagues, the more money passes through his hands and settles in the bonus fund. About how this position is correct, to judge the investor or business leader.
')
Many CIOs are ready to outsource only unique functions, whose list is extremely limited. The remaining tasks, they believe, should remain within the company and be solved by its IT department. But this position conflicts with the point of view of investors and CEOs who care about the efficiency of companies. To achieve efficiency, including the use of IT, is quite difficult if you concentrate everything inside.
For example, how to ensure any competence in 24 * 7 mode? It seems that you can do 3 specialists. And if the IT service is responsible in the framework of a hard SLA? Then you need a shift on duty, and this is already at least 5 people. How to organize and use them in real work is the art of managing the CIO.
By and large, the task of CIO is to ensure the effectiveness of the automation of the company's processes. However, the IT service does not always correctly understand its tasks. And here a situation arises that is becoming more and more common: integrators go to the business through the head of IT and quickly agree with it, arguing their proposals from the standpoint of efficiency.
In fact, without taking into account the requirements of the CIO, no outsourcing project can be successfully implemented. It is necessary to make sure that the person responsible for the project is interested in its implementation, its growth within the company and receiving a bonus for the work done. But this is more the case in theory. But in practice, in one company there can be several customers, and each pursues its own interests, which do not always ideally coincide. And in search of a compromise, it is often necessary to participate in the affairs of the company of the integrator, whose superposition often provides a positive result.
In addition, we finally come to the understanding that without the approval and understanding of the business it is extremely difficult to implement large outsourcing projects. Their fate, in fact, depends on the business, since it is the business that allocates funds and is responsible for them.
The world is changing
In fairness, we note that the above and other possible arguments in favor of and against outsourcing models are not new. At the same time, large-scale changes are taking place around us, which in one way or another influence the priorities of the business and its attitude to outsourcing.
On the one hand, companies have become more mature, and on the other hand, new personnel from generation Y, which has grown with devices in their hands, have begun to enter the corporate environment (IT and business). The representatives of this generation have their own view on many things (for example, on state regulation), which seems unthinkable for the older generation of managers.
This is easily illustrated by an eloquent example of database management. To support them, you can keep expensive staff or transfer the appropriate competence to outsourcing at reasonable prices - and it is more convenient and more profitable.
Points for and against"
Any disputes about outsourcing practices can be conducted to infinity, which, in fact, occurs since their inception. The most frequently heard argument is “for”, according to which outsourcing is cheaper. But perhaps the main thesis of supporters of outsourcing in recent years has been the following: it’s not cheap but the fact that outsourcing allows you to manage the price / quality ratio.
This makes it possible to structure IT services in such a way that you begin to understand their real value. Accordingly, then you can choose what you directly need, and either reduce the cost to the detriment of quality (while continuing to clearly assess the level of quality), or vice versa, raise the level of quality by increasing the cost.
In order to fix the level of quality, you will have to incur initial costs. But in the future it may be possible to reduce the cost of consumed IT services by a few percent per year - by honing IT processes and increasing their efficiency.
As for the arguments against ... Over the years of outsourcing practice, a whole collection of misconceptions has been formed (they were vigorously discussed in the outsourcing section at InfoSecurity Russia 2014), which we would like to break into “thematic” blocks and comment on them.
A responsibility
"Outsourcers are not responsible for the system with the head, but only within the framework of the SLA." For small companies, this is probably true. But for large ones, no. As a rule, the experience of an outsourcer can be assessed by the thickness of its SLA, and for large companies, typical SLAs reach 80–100 pages, where only the first 2 points represent the basic conditions, and all the rest - the very “if”. So, the statement about the irresponsibility of companies is simply incorrect.
"There is no specific person who owns all the information and is responsible for the system." This is also not entirely correct statement. If a key specialist is not in place, he is sick, he is lured away, what will happen to the system for which he was responsible? Will it collapse?
The absence of such a specialist is not a minus at all, but rather the risk of the customer: he is dependent on the person who has locked the system on himself. At the same time, an outsourcer on large contracts always has a dedicated manager and a separate team for the customer.
Work with information
"Outsourcers can see too much when working with the system." Can So what? This statement in itself is not consistent, at least for the reason that the employees of your company can see exactly the same with the same probability. So, inflating the risk of losing confidential information through external companies is not quite correct. If the IB service has correctly organized and delimited access to information, such information can be transferred to the outsourcing partner, while retaining control over its condition.
"On the outsourcer side, data can be stolen / distorted." They can certainly steal! However, as the employees of your company. To distort is extremely unlikely, as the outsource provider is responsible for the services provided to you within the framework of the very same SLA that everyone likes to talk about.
"It is impossible to control the work." Here again the question arises of the maturity of the company's processes. If your internal employees are able to control the perimeter and the work being done, you should have no problems with external ones. Saying “we’ve given everything to outsourcing” and losing control is absolutely wrong. There should always be an internal manager who controls the contract and checks the correctness of its performance on the basis of the expected economic results that affect the performance of the business as a whole. If the results do not meet the expectations, this is a reason to analyze the situation and certain conclusions.
Controllability
"Own employees will figure out everything faster and really do things." When something happens for you, everyone runs, rustles, something happens. And the outsourcer has 15 minutes gone - nothing, 20 minutes gone - nothing ... So Does he do something or not? "And you did not think that when the manager leaves the office for an external meeting or goes on vacation, does the external activity of the division change? It is possible that all this running around is nothing more than an imitation of turbulent activities. An outsourcer can also show you how its employees can They can even upload videos to YouTube or transfer camera recordings to you.However, only the response to the incidents is important, and it depends on the work of the customer’s manager, on how the communications are built.With a properly constructed communication, you will not have time to notice the incident as you will receive SMS: "There was an incident. Already corrected!".
"To control only SLA is ineffective, it is impossible to take everything into account." What can be controlled can be outsourced. That which cannot be controlled cannot be transferred - it is better to leave it to your own team until the control becomes simple and clear. Or maybe suggest to an outsourcer to make this question transparent? After all, the topic of control is also relevant for your own team. Even perhaps more so.
"Outsourcers do not know the inner kitchen." The problem will disappear instantly as soon as the internal kitchen is described within the SLA. If you cannot describe it, then we must honestly admit that the problem is not connected with the outsourcer: the company itself is simply not ready to outsource and optimize IT efficiency. In this case, outsourcing will not initially be effective. In companies with a high level of maturity, all the features of domestic kitchens fall into the regulations and procedures.
Role in the process
“An outsourcer builds all processes for himself, and the customer becomes addicted for life”. From the point of view of the outsourcing provider, this is normal. In marketing, they even came up with the appropriate term - “swaddle the client”. But the client is not a helpless doll, and has the right to make his final choice on his own.
There is another term - “Transition period” - time (and money) for which an outsourcer can intercept work from another contractor. As a rule, processes and SLA are not built for a specific outsourcer, but so that there are always two or three partner companies that are ready to meet the same requirements, you just need to remember the advantages of competition.
“You can deal with your staff much faster (by concepts) than with an outsourcer (under an agreement).” Right. But only if the customer can really quickly deal with his own employees, having a wide range of interventions in his sleeve. However, in practice, for some reason, this is not the case. “The highest measure” - dismissal - not only does not help “disassembly”, but also creates additional problems in hiring a new employee. In the case of an outsourcing contract, this is a partner problem.
Two truths
Perhaps over the years of practice, two truths have become the main rules of outsourcing.
The first is that outsourcing is not expensive or cheap; it is effective or inefficient. If it is ineffective, why is it needed! And if it is effective, and it is justified and proven to the shareholders of the customer, the money for it, as a rule, is much easier than for dubious projects.
The second is that risks in outsourcing do not disappear anywhere, they are simply replaced by others. The risk associated with its own staff goes away, but there is another one related to the monitoring of partner competencies and regulations within the framework of the SLA. IT risks, like other risks, need to be managed. And life according to SLA is an art that needs to be learned, and experience comes only with practice!
Source: https://habr.com/ru/post/240629/
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