Friday, July 30, 2004

Are You an Ideal Candidate for Outsourcing?

Creating and maintaining the right relationship with suppliers is instrumental in realising the benefits of IT outsourcing. Fujitsu believes that IT outsourcing has matured greatly since the first big contracts were awarded a decade ago. The first and second generation of contracts tended to concentrate on offloading costs, but made little provision for innovation and change.

Based on new research by Fujitsu, a new, third generation of outsourcing is being proposed; whereby outsourcing is an ongoing and integrated part of an organisation's business strategy.
The new approach was derived from the experience of Fujitsu's people engaged in outsourcing agreements. Using surveys and focus groups, Fujitsu was able to bring together the collective experience of their staff and develop key recommendations and structure for the next generation of outsourcing.

Benefits to be realised from this new model include improved operational performance; higher service levels; reduction in time to market; increased IT staff retention and risk reduction.
Third generation outsourcing is relevant to all retailers, whether they are currently engaged in IT outsourcing or are outsourcing for the first time.

To help organisations better plan their investment in IT outsourcing, Fujitsu has developed a five-point plan that summarises the new collaborative approach. (see below)

This approach transforms the outsourcing deal from the traditional buyer-seller arrangement to one of co-operation and a shared vision of what can be achieved.

It also plans for constant improvement, with the focus on those parts of the business that will yield the biggest benefits.

The approach also assumes a strong level of co-operation and engagement at all levels between the two sides of the arrangement. In that way, technology ceases to be a brake on progress and becomes a true enabler for progress.

Fujitsu's five-point plan to successful IT outsourcing:

1. Ensure cultural alignment
Successful IT outsourcing depends on a shared vision and approach to working together, with like minded people working on common goals.

2. Set clear, measurable objectives
Align the IT objectives and the business goals with a common focus on meaningful business and operational objectives. Avoid the pitfall of micro level objectives and do not expect results overnight.

3. Keep sponsors engaged
Have appropriate relationships at all levels of the client and supplier organisation, including the key sponsors from both parties to keep the agreement on track.

4. Expect change
Things will not stay the same for long. Expect and accommodate business change, operational improvement, and technology enhancement.

5. Win win
Acknowledge and welcome the mutual dependency an outsourcing arrangement creates. Ensure that your objectives are aligned and that a win for one party is also a win for the other.


Sunday, July 25, 2004