In FAO the IT division has been expanding its capacity to deliver IT solutions through direct sourcing of non-staff resources in order to meet the more and more increasing demand. This continuous increase in direct recruited resources has become more difficult to manage as it increases administrative processes burden. This also poses a challenge in managing and monitoring progress of the deliverables and the relationship with the clients. The result that we have experienced is an exponential increase in backlog of undelivered solutions, difficulties to meet agreed SLAs with clients and increasing demand for additional people. So recently we decided to seek for alternative sourcing options such as outsourcing many of our solutions and services to external companies.
Including outsourcing as an option for delivery poses many challenges and we need to analyze diverse criteria before taking the plunge. In this article we will discuss some of the major considerations that are being taken in the IT division in relation to this transformation.
Below are the top three advantages which are recognized in going to this direction:
1. A simpler and faster onboarding process
It is becoming increasingly difficult to find developers, moreover for short missions. On top of the time needed for recruitment, interview and negotiations, it does also imply a lot of lengthy administrative processes which do not permit to have quickly resources on board, so it is very challenging to leverage our capacity to deliver with limited internal resources in a fast-paced environment.
On top of this, the IT division is suffering from important delays due to administrative overhead (these delays in terms of internal processes and procurement activities for new contracts is an important factor to limit internal sourcing).
The onboarding issue is limited in case of external resources, it is sufficient to have in place the right sourcing contracts in place and raise an order accordingly.
2. Easy access to a global pool of talent
It can be really challenging to get the right skills from our local pool of resources when a project involves new technologies or when the identified internal resource is already busy in another project. The outsourcing allows to find the best skilled resources from companies specialized in development, it gives also the possibility to have these resources for the limited time of the project without the need to train up an employee or to move a resource from one project to another one. This normally guarantees a work of better quality with a faster response time and a more cost effective approach.
3. Scalability and continuation of work
Scalability is currently our biggest issue. Some projects have short deadlines and need burst of additional development effort. Currently, this is mainly done by prioritizing projects and moving internally resources from one project to another or by bringing new resources not immediately trained and fit for the job. Putting in place a partnership with a large outsourcing company allows an on-demand consumption of resources. We can plan accordingly the number of resources only for the time of project without caring about training, recruitment, vacation and sickness and most importantly without affecting the other projects already started. In fact it is even possible to have development on going whilst internal resources are sleeping or when the office is closed. This means that our clients can have access to our services when normally this was not possible,
However the move to outsourcing could be challenging and it is important to consider also the following:
- Clear identification of why we want to go to outsourcing
It is common knowledge to consider primarily the cost-cutting as the main motivation to outsource IT solutions to external providers, however, in recent years the industry has greatly evolved and many providers have with great extent invested in the quality of their services. Our investigations have proven that one of the main drivers for outsourcing is generally economic as outsourcers often provide more competitive prices for the same services at same quality of service, whereas in the IT division, this was not the only factor to consider as we also need the possibility for staff to concentrate on more strategic functions whilst having a portfolio of services provided by outsourcers.
- Emotional journey
Moving from an insourcing model to an outsourcing model can be emotional, it is crucial that this experience is done with an environment of collaboration and cooperation.
For example it is generally considered that having the resources in house allows changes in the requirements to be accommodated much more swiftly and dynamically. While this may seem as an advantage, it also introduces many problems such as a reduction in the discipline of providing clear and accurate requirements and an appropriate delivery plan.
In view of outsourcing, the internal resources should change their mindset and concentrate on delivering clear, detailed and complete requirements with a clear plan including milestones, deliveries and inputs from clients.
- Communication is key between internal and external resources
It is important to build the outsourcing capability on a strong collaboration and partnership with the external providers, investing appropriate time during the initial stages to ensure value is then achieved throughout the process.
Outsourcing development isn’t an easy task, it’s a journey that requires some clear expectations and a great realism on both sides.
The challenge for the CIO today is to build on this experience to take full advantage of the full range of immediate and long-term benefits outsourcing can bring to a business..
This might be in a form of a hybrid model where the outsourcing company is putting in place a local interface and where internal resources are involved at some stages of development with an ultimate goal of feeling owners of the developed product, the testing and the deployment. It also gives the possibility to maintain and extend internally the product. So external resources are used for delivering a product and internal resources keep the control and the ownership at all stages of the process.