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outsourcing your IT needs - a Review of the most Common Objections to outsourcing IT / BPO offshore

One Throat to Choke
By Dan Socci, VP of Technology Services, HP

CIOs and their internal tech support organizations will not be surprised to hear that they are heavily outnumbered by their vendors, but the numbers are startling nonetheless. According to an IDC global market intelligence firm whitepaper sponsored by HP titled, "Reducing Complexity and Cost While Maintaining Control: HP Integrated Support Management," based on company size, an organization may have from 12 to several hundred individual contracts with each vendor. According to the same paper, half of all organizations manage support contracts with more than 10 vendors, and one-fourth of large organizations over 25,000 employees manage support contracts with more than 100 vendors.

This proliferation of support contracts creates a range of serious problems for CIOs and their teams, including:

1. Time and resources drained by negotiating, procuring, administering and managing multiple support contracts.
2. Inconsistent service levels and incompatible--or no--service level reporting.
3. Multiple support interfaces and time wasted in "blame" scenarios.
4. Continually increasing IT support costs.
5. Support providers who lack business accountability.
6. Layering of additional complexity when IT is already struggling to keep ahead of change in multi-technology environments.

These growing problems have given rise to a new breed of technology support in which providers offer to move accountability from inside the enterprise to a single point of external contact. Like the value proposition of any outside service, providing "one throat to choke"--one point of support management in complex IT environments--frees internal resources to focus on core business activities.

However, it is important that CIOs and others responsible for making these decisions carefully evaluate their options. For example, streamlined management of a multi-vendor IT environment is not enough--an outsourcing partner must also be ready to establish service level agreements (SLAs) and ensure a high level of accountability.

This article addresses five common concerns associated with moving support management outside the enterprise and provides advice about selecting an outsourcing partner as a single point of contact.
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Concern #1: I can't have vendor accountability in a multi-vendor environment.

Deploying technology from multiple vendors can lead to finger pointing between them when things go awry. However, migration to a single vendor environment is not your only escape. It is possible to consolidate responsibility for all vendor management and service delivery with an outsourcing partner that has expertise across a wide range of hardware, software, and applications. Be sure to ask this question, and demand a detailed answer: Precisely how can you ensure that I will have world-class IT from multiple vendors without compromising my service levels?

Concern #2: If I use a single vendor to manage my multi-vendor environment, I'll lose control over budget, resources, vendor selection, and technology utilization (all the critical components of IT operations).

Consolidated support management can actually give you greater control of your IT environment and deliver tangible and measurable business benefits. Talk to your outsourcing partner about their commitments to reducing commercial risk, cutting operational involvement and contract administration, providing consistent service levels for the entire IT environment, and ensuring rapid change management. Your outsourcing partner should be able to provide references, cite predicted cost savings, and define exactly how and when you and your team have the final decision-making role.

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Concern #3: In order to avoid the headache of multi-vendor management, I'll need to outsource my entire IT environment, but we're not ready for that.

For some CIO's, complete outsourcing is the right answer. However, for CIOs who want to maintain any level of control while still needing to manage multi-vendors, using an outsourcing partner for support management can free them to focus on their internal environment. An outsourcing partner with expertise in multi-vendor management can act as your primary service partner, consolidating support contracts from different vendors and managing entire heterogeneous environments at strict service levels under one service agreement. This provides one point of accountability for IT support, but is not the same as total IT outsourcing.

Concern #4: Our business and IT needs are constantly changing--it's so volatile, I can't decide what to outsource and what to keep in house.

You need an outsourcing partner who can adapt as your environment--and your requirements--change. Question your outsourcing partner closely on this: Do you offer a support management continuum? Make sure they offer a complete spectrum of support management--ranging from a customer controlled environment to a fully outsourced operation--to provide the flexibility you need. You can't know what the future will bring, so you need to be sure that the outsourcing partner you choose is ready to help with any eventuality.

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Concern #5: Adding one more vendor to the mix will just be an additional strain on my IT budget.

Some of the key reasons to use an outsourcing partner for support management include reduced demand on in-house resources, lower support costs, less downtime, reduced risk of failure, higher user satisfaction, better visibility, control of support quality, and flexibility to deploy resources wherever needed. In this way, outsourcing the management of multiple IT vendors will actually reduce costs and increase the value that IT brings to the business. Ask your outsourcing partner how they plan to help you achieve better alignment between service levels and business needs. Also, question them closely about the role they plan to play in measuring and reporting on SLAs to ensure that all service providers are performing on target.

IT heterogeneity is the reality today, and as CIOs seek ways to manage it successfully, consolidating support management with an outsourcing partner is a powerful approach to saving time, costs, and achieving accountability.
An outsourcing partner can reduce IT workload and costs and raise productivity by freeing internal resources for core business initiatives. As you do your due diligence to find the right outsourcing partner, demand detailed answers to questions about measuring and reporting SLAs, involving your team in strategic decision making, and supporting a wide and growing range of vendors and IT capabilities as your business and IT environments change and expand.

About the Author:
Dan Socci is vice president, Technology Services, HP. He can be contacted at dan.socci@hp.com.          Publish Date: January 2006