There are these things in life that one needs to do once a year, that no one likes to do at all. For me one of these things is Taxes! I don’t do it often enough to get the habit of it, so I finally hired a specialist to take care of it. It’s really relaxing to know that this specialist takes my pile of papers and “takes care of it”. However, I discovered that “taking care of it” isn’t enough when you arrive in more dynamic financial circumstances. Just “taking care of it”, i.e. “making sure everything that has to be declared is declared”, does not cover the need to have a regular conversation about what is or isn’t the smart thing to do and act accordingly (e.g. avoid profit tax through investing just enough). So, I learned that by hiring the specialist in the past, I lost a lot of experience myself and didn’t realize that through automation and intelligent software, I can do a lot myself without having to consult this specialist!
Over the last two decades, many organizations got tired of having to maintain their IT infrastructure and applications. They hired specialists (outsourcers) to take care of their applications to make sure they could fulfill business, legal, regulatory, functional and technical requirements.
However, in more dynamic circumstances (e.g. increased global competition, everything digital, systemic automation, rapid innovation), just letting such an outsourcer “take care of IT” does not address the increased business demand for digital innovation. In fact, more and more organizations see these outsourcing agreements as major blockers for innovation.
It is important for these organizations to realize that nowadays, through systemic automation and intelligent software (cloud services, beyond hosted VMs), they can do a lot themselves without having to consult these specialists (outsourcers) and with minimal effort, compared to a decade ago.
Einstein stated decades ago: “The significant problems we have cannot be solved at the same level of thinking with which we created them.”.
Translated to IT outsourcing, contracting an outsourcer to deal with the increasing business demand for innovation won’t do the trick. Many IT outsourcing contracts weren’t a result of strategic business decisions, but more punitive in nature: the “your mess for less” mentality against costly single source IT. And at the time it perhaps made sense – technology “Streets and sewers” could be maintained by the lowest bidders. Streets and sewers are table stakes for every organization.
The cloud changes that model providing more efficient, cost effective and modern streets and sewers that don’t require the maintenance and operations, as well as other city infrastructure that allows the business to leverage and focus technology decisions for strategic purposes, such as digitally transforming their entire business model.
Agility cannot be achieved without engaging business leaders, management and the user community. Agile methodologies require continuous engagement with business managers and users, where a continuous stream of new and modified software is delivered into the operational environment. This requires significant change in working practices for both business governance and relationship management, and the infrastructure and operations teams. Translated to outsourcing, risk sharing and common business objectives will be key to success. The service provider needs to subscribe to the customer vision and work towards a solution approach. The service provider is no longer the classic outsourcer but needs to become/behave as a valued partner. Changing attitude from being “one of them”, providing supporting services, to being “one of us”, contributing to our joint success is a big, important shift in thinking and relationship (from them to us!). A partner does not just take care of IT, they are vested in your business success!
The takeaway of this all: It’s essential to reconsider your sourcing strategy and model when facing increased business demand for digital innovation!
Paul Fijnvandraat started at Microsoft in January 2011 as Technical Presales and moved to Microsoft Consulting Services in October 2013 as Principal Consultant. Prior to joining Microsoft he was Chief Technology Officer on a large outsourcing contract for HP Enterprise Services. He has been working in IT for almost 30 years within various roles. As principal consultant he supports enterprise customers by translating their business and IT objectives into changes needed in their organization, processes, technology and people in complex heterogenic environments. In his own words: “Creating breakthroughs in paradigms, beliefs and behaviors that deliver business value outcomes.”.