Even though IT outsourcing regularly becomes a topic (mergers, acquisitions, next generation sourcing ...), it needs a lot of expertise and experience. Without good project management, IT outsourcing will not be a success. Holger Bredenkötter has been working as an IT consultant on this topic for more than 20 years. In his article, he explores the question of why IT outsourcing projects always represent a state of emergency for companies, what IT managers need to pay attention to when the time comes and why you actually need four project managers.
Even if the new IT provider and the customer have already worked together successfully in previous years, the renewed service takeover after a provider intermezzo is still not a piece of cake and can become a lesson. noventum consulting has accompanied such a case in an advisory capacity and the realization on all sides after successful project completion is: the combination of a provider change with extensive system changes must not be overstretched if time pressure is high at the same time.
The outsourcing market already reached ever new record levels in the past, both domestically and internationally. The number and complexity of provider agreements keeps increasing, so do the challenges for the IT procurement department. Not only does the latter have to master shorter sourcing cycles, but ever more frequently said department is also taking on the role of provider management. In the future, the IT procurement department – as central bearer of know-how – will decisively co-determine what’s going on in sourcing in the company. Whether or not the department assumes the leading role will, to a certain extent, depend on who within the company is one step ahead in terms of specialist knowledge.
Over the past few years, more and more IT service providers have relocated services to countries with lower wage levels, especially India. The aim of this offshoring is to meet the increased competitive and cost pressure of the markets. However, many companies had to realize after outsourcing that the expected savings potentials can only be partially realized. As great as the business incentives are, as high are the demands on the provider management of these offshore projects. Due to intercultural differences, serious inefficiencies can occur in such projects. In addition to purely organisational challenges, it is especially the large cultural differences that have a decisive influence on the success of an offshore project.
Digital transformation is everywhere! As if the IT-technological development of the last decades had only been an insignificant foreplay, digitization is on everyone's lips. No socially relevant field remains unaffected by this and it seems to be all about the question of speed. The demand for agility and flexibility sets the pace, and this has already clarified what the dynamics of digitization are aimed at. The different players are quite differently positioned and IT departments in companies are often unable to keep up with the pace on their own. Sourcing to IT service providers can relieve the burden on them, whether they are external service providers or internal service providers in larger groups. However, the ever-increasing expectations from business about the speed and scope of digital transformation are also changing the relationship between IT departments and their service providers. In the future, they will have to move much closer to the specialist departments in the companies in order to be able to deliver precisely and quickly.
Since Indian companies have, for a long time already, been successfully acting internationally as software producers, outsourcing deals have, in recent years, increasingly be awarded to India. In the day-to-day work of provider control, cultural differences become apparent that can make a successful cooperation considerably more difficult. German managers and administrators must be aware of these differences in order to do a good job with the Asian partners. Outsourcing expert Tamara Wagner of the IT management consulting firm noventum consulting has made remarkable observations in the cooperation with large Indian providers.
As it is known, in a Microsoft infrastructure, access to resources, data as well as applications is controlled via Active Directory (AD). Depending on how complex the business structures mapped are, AD not only controls access at 1:1, but also describes the different levels of the trust relationship between individual domains. A mostly complex system that reflects the inner dynamics of a company like a mirror image.
Everybody is talking about outsourcing, scenarios for sourcing models are state-of-the-art.
If the internal IT service provider decides to outsource parts or whole areas of its provision of services to one or more external providers, i.e., to initiate an outsourcing project, then a lot of framework conditions are changing for it.
Not all IT providers are alike. The customer structure and hence the portfolio make up part of the distinction, as well as the actual position in the technical upgrading cycle which all IT providers are more or less subject to. The consultants at noventum consulting have been working in the IT banking environment since the mid-1990s. In an editorial interview, noventum Management Consultant Markus Ristau and Stefan Wolters put together key data for a situation analysis dedicated to this special kind of IT Provider.
