Outsourcing at the heart of strategic IT thinking
Jean-Marie Marioton
The outsourcing of large accounts is, without doubt, showing significant growth. But the question is: why is it so successful and why does it still remain at the heart of IT strategy? It is easy to remember the various restrictions which existed until a few years ago with the outsourcing of data processing. Therefore, before continuing, it could be useful to give a definition of outsourcing.
Outsourcing is defined as ‘the integration of a group of primary services, entrusted to a service provider. The service provider may receive all or part of a customer data system, by way of a multi-annual contract with a specified service level and duration agreement.’
In other words, it is the externalisation of all or part of the management, information system and data processing to a third-party contractor. This task is not a temporary one-shot mission; it must be carried out so that it lasts. The externalisation of data processing is therefore the main step driving the need for outsourcing. Its objectives are historically to reduce costs, limit risks and to enable companies to concentrate on their core activities.
However, companies are increasingly transforming their information systems and processes in order to improve their performance. Indeed, with information systems continuing to increase in complexity, it has become a major strategic issue to maintain optimum operating conditions. With this in mind, detailed attention must be given to maintenance, versioning and secure system access.
A lot of factors must be taken into account to guarantee optimal performance. Conscious of the extent of the task and the number of essential resources required to maintain complex infrastructures, the IT system manager will be reliant on specialists. However, due to requests from outsourcers and the need to accomplish the missions, a number of restrictions have had to be lifted. Let us not forget that it is indeed the externalisation of a company’s data, past and present. Beyond the pure technological aspects, concepts of quality and integrity take an important role in these projects.
In context, various traditional software firms and ISPs modified their positioning within the industry in order to integrate into these new trades and to reposition themselves as outsourcing experts. At the heart of the service providing business, these new structures, with great improvements to service quality, are now repositioned as true partners and not just simply as service providers. This fact is clearly illustrated by noting the strategic nature and duration (several years) of these projects.
Indeed, forging strong relationships with service providers is a complex process. It requires a long-term vision as well as an understanding of both the customer’s and service provider’s requirements. This is explained by the many aspects covered by the service provider: active third-party maintenance, hosting, project management, computer security…
These various elements are at the root of the success linked to service provision. By placing quality, results and availability at the heart of the economic model, the service providers are able to provide an improved service. These various elements are at the root of the success of this model, but nevertheless, to remain strategic partners, the latter must constantly evolve and improve their service quality.
Web-site sub-contracting can be equally perceived as the capacity to entrust a "small part" of an information system. This strategy makes it possible to test in real situations the service provider, while limiting the risk.
Many companies choose this option for projects which are not in their core activity or for services which require specific or different constraints. The sub-contracting of web sites requiring a more evolutionary architecture also falls into this category.
The sub-contracting and the hosting of web sites are two different types of service. The service provider supervises the performance of an application seen by a net surfer, implements solutions when problems emerge and ensures the coherence of data (regular system update processes), in an orderly manner, without interruption.
Within this framework, the service provider can offer complementary services such as: web-mastering, referencing, user replies via mail, hot-lines, statistical analysis…. This wide range of services and options can be discussed with the service provider.
About Jouve
Specialist in information treatment, the Jouve Group answers the needs of companies, institutions and editors producing and distributing information.
To develop their content, Jouve is able to retrieve, manage and distribute information either on paper, internet or on-line PDA, CD-ROM or eBook.
The Jouve Group:
Personnel: 1300 employees,
Turnover: 105 million euros - 2008.
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