Outsourcing and Offshoring

Introduction

An organization’s competitive advantage is embodied in the often complex portfolio of applications contained within its walls, and in the business processes that these represent. And yet, maintaining these applications can often consume as much as 80% of the IT budget, seriously impacting the ability to grow and further drive innovation at both a technical and business level. The applications on which company success stands have often become a barrier to the very success that put them there in the first place – a distraction from core business pursuits.

Outsourcing represents an attractive proposition, allowing companies to focus on core activities. Deriving maximum value from an outsourcing engagement relies on careful planning, starting with a thorough understanding of which applications it will benefit you most to transition to the outsourcer, and which are best retained in house.

Once the decision has been made, the speed with which the transfer of control, and the efficiency with which the outsourcer is able to start maintaining the applications, can seriously impact the value delivered.

APM offers both the end user and the outsourcer the ability to manage effectively the transfer process, by enabling the careful documentation of the entire portfolio, where the value lies, where complexity exists and allow both parties to understand precisely the boundaries of responsibility and reduce the likelihood of unexpected surprises at a later date.

Once underway, the success of the contract relies heavily on the accurate sharing of information, and on the ability of the outsourcer to drive efficiency into their management of the application portfolio now under their control.   APM enables consultants to become effective quickly, to provide detailed documentation throughout project engagements, and to assess the risks and likely effectiveness of consolidation and simplification activities to drive further cost and efficiency benefits.

CIO / Executive

The decision to outsource is never taken lightly. For every successful engagement described in the press, there would appear to be an equally unsuccessful one vying for scrutiny. The battle to get the outsourcing balance right in any organization is not an easy one. Having the detailed fact-based information on which to base strategic decisions about the future management of the IT portfolio is vital.

Architect

Much of the preparation for application outsourcing falls to the IT Architect, to engage with the outsourcer in describing the scope, current state and future goals for the infrastructure. Managing this process of communication relies heavily on accurate, documented information about the applications, their complexity and potential value to be obtained from each one within the context of a rationalised portfolio. Both a high-level view, across the entire enterprise, and the deeper introspection of each application being considered is required to provide the architect with this type of information. A similar level of insight is required for the on-going management of the outsourcer, to ensure that future state projections remain in line with the evolving needs of the business. 

Technical

Technicians, working as part of an outsourcer engagement, can benefit enormously through rapid understanding of the applications on which they are working. Portfolio simplification brings with it a requirement to reach inside the individual applications and programs to seek out redundancy and duplication. The insight provided through automatically generated documentation, impact analysis and complexity metrics can boost developer efficiency by between 10% and 30% alone.

Conclusion

Solid APM discipline is vital when any outsourcer is engaged, not only in ensuring the initial contract and project terms are laid out correctly and in keeping both high-level and deep-dive portfolio information, but also in the on-going management of the project – ensuring that the delivery of business value remains firmly at the forefront of the outsourcer’s mind.