IT outsourcing: how to achieve efficiency?

It is known that exactly desire to optimize business is the cornerstone of transition to external technical support. Transferring the IT infrastructure to service to the third-party contractor, the company has an opportunity to focus resources on core activities and to increase own attractiveness for financial institutions that is indisputable strategic advantage. If to speak about qualitative indexes, then it should be noted that the external technical support helps to receive the guaranteed service at the high professional grade. The quality standards of the provided services are fixed by terms of the contract, and the contractor bears responsibility for his execution, including financial.

Operational and technology advantages are connected with flexibility of the outsourcing company, its capability quickly to be rebuilt according to needs of the customer and it is easy to change scales of services. Besides, the contractor can quickly involve highly specialized specialists who for one reason or another are absent at the customer and also to exempt him from need to constantly improve skills of IT personnel.

To whom can outsourcing damage?

It is important to understand that in certain cases transition to outsourcing can lead to negative effects. In addition to natural risks which steadily arise at transfer of IT infrastructure to external service there is a danger to appear in a situation when the outsourcing project is ineffective or even unwanted. In particular, it is possible to mention support of specific industry business applications: if the company has regular specialists solving this problem, then often the service provider of outsourcing will not be able to offer more advantageous conditions of service.

As a main objective of outsourcing are as it was already noted, optimization and cost reduction, transition to external technical support is profitable to most the companies working at the market, in particular for the geographically distributed organizations. However and there are certain risks.

Outsourcing and geographically distributed business. How to avoid losses?

Transfer to outsourcing of a regional branch network helps to cut down expenses if the uniform contractor for service of all complex, multilevel IT structure is attracted. When the large company uses own forces in regions or signs contracts with several suppliers on places, it is faced the need to build all processes independently and to incur serious expenses, constantly spending forces and means to receive service up to standard. In case of involvement of one IT supplier having own resources in regions it is possible to reduce material and time expenditure as service happens within one contract according to which service of all points of federal network is performed according to the uniform quality standard. The company not only receives identical service quality on all network, but also saves on management. It is very important to select the experienced outsourcer who created the network for an appreciable length of time and managed to implement not one project with its participation. The supplier is obliged to provide the service level according to SLA (the agreement on the level of service), to show the high speed of reaction to the customer's requests, to come out as fast as possible to the platform, in the shortest possible time to perform implementation of temporary and permanent solutions — experience plays a crucial role in such situation.

In Russia this scheme enjoys popularity, and it is profitable also the fact that regional branches of the companies are in different time zones. With respect thereto quite often there is a need for the round-the-clock service of the IT park that when implementing such service by own forces leads to big finance and personnel costs. Besides, on the supplier responsibility for information security which is fixed by the confidentiality agreement lays down.

Among those who are interested in IT outsourcing of branches it is separately possible to note the geographically distributed state organizations. In addition to a problem of service of IT infrastructure of wide network of federal and regional representative offices, the state organizations face also other questions. As a result of informatization program implementation IT infrastructure of a public sector becomes more difficult, the quantity of serious IT tasks increases, however rates for IT personnel in state structures still remain small therefore there is a problem of involvement of the third-party highly qualified specialists capable in a complex to solve new problems. Involvement of the outsourcing company to service of the IT park — one of the ways out of current situation.

How to make outsourcing cheap and effective?

First of all the organization should define the purposes of transition to IT outsourcing accurately. The main, as a rule, is reducing costs for the maintenance of non-core department. Besides, the company is usually interested in the following:

• in service of its IT park at the high professional grade (the outsourcer secures ensuring proper service quality with terms of the contract and bears responsibility for its execution, including financial);
• available the transparent scheme of costs and in detailed pricing (some companies have no exact expense information on the maintenance of IT infrastructure, how they will change in case of its expansion or reduction);
• in economy of resources of own IT personnel (the customer company sometimes needs to exempt the employees from the current routine work for the solution of more difficult tasks of business development).

After determination of the purposes it is necessary to describe what processes happen in IT service what specifically functions and tasks it carries out. Further it is important to estimate what functions to transfer on outsourcing what it is better to reserve.

In return, it is also important to external supplier to formalize the available tasks, having decided on what questions should be in his competence and for what reason and what should remain with the customer.

Process of transition to outsourcing will take place quickly and effectively if:

• The IT service of the company already has the directory of services for business (the operational directory);
• both parties carefully worked out SLA and also registered necessary regulations, instructions;

the main IT processes go up to standard and all statistical data, including information on how earlier service of IT infrastructure was carried out are collected.

When the company addresses the outsourcer at large, the revealed requirement and accurately assigned task, the service provider needs longer period to conduct an infrastructure research, to build processes and to differentiate powers.

How to select the reliable partner?

When choosing the supplier first of all pay attention to its work experience in similar projects, reputation in the market, stability — both financial, and organizational, existence at it of methodology and regulations, necessary resources and technologies, to qualification of personnel. The main component of effective support of services and systems is highly skilled personnel as IT services are hands and the head of specialists. Also existing processes and tools which help to implement these services have important value. One of indicators of qualification of specialists of the outsourcing company — presence at it of the appropriate certificate. The conventional international certificate is ISO 20000. If the outsourcer has like that, it demonstrates his serious approach to the organization of processes of service.

How to avoid the unprofitable contract and to reveal the hidden expenses?

The outsourcing contract consists of two parts: the first includes the main terms of the contract, and the second — SLA which defines the cross liability of provider and users of the IT service. The standard SLA model should include the following sections:

• determination of the provided service, the parties involved in the agreement, and durations of the agreement; time when service is offered;
• specification of maintenance entities;
• service quality measure description, including a method of calculation of each metrics and target figures of merit;
• the description of procedures of interaction of the parties at all levels — from the level of requests of users to the strategic level of development of relationship of the parties;
• description of restrictions and dependences of level of service on external services;
• description of procedures of the reporting;
• process of improvement of SLA;
• procedure declaration of a withdrawal from a treaty.

Special attention needs to be paid to the description of those works which are undertaken by the outsourcer. The contract can be unprofitable for the customer just because he does not meet his basic needs and mismatch between what needs to be executed, and what money is paid for comes to light.

As for the main terms of the contract, at their approval it is important to approach an issue of pricing seriously. The price is understood as not a fixed amount, but a certain model, and here it is necessary to decide on how this price will depend on change of these or those parameters in the contract: size of infrastructure, service quality, etc. We mean a question of information security not less. Within the contract it is necessary to approve and to legally issue policy of providing Information Security, it should be the document similar to already existing politicians of both parties. It is important to register in details all potential risks and to state an order of interaction at information security support and also to pay due attention to the description of responsibility of the parties.

Within work on contract negotiation the customer needs to consider possibility of risks of loss of core competencies, especially at the initial stage of the project. The company can lose those employees who are carriers of core competencies and technology knowledge therefore the serious failure as provision of services is not excluded while the personnel already left, and the outsourcer did not adjust high-quality service yet. However it is possible to avoid such situation thanks to transfer of employees of the customer to the outsourcer that can be the integral term of the contract.

In order that after transfer of IT processes of the external company the customer did not get into a dependent situation, it is necessary to build qualitatively the system of transparent relationship and to record it in terms of the contract, having achieved existence of all regulations of processes.

When there are results and how to see them?

The real effect of transition to IT outsourcing can be gained after two-three months of joint work. The first months of project implementation will demand efforts of both parties: the customer on an equal basis with the outsourcer should spend time and other resources. If the customer is not ready to it, emergence of dissatisfaction from joint work is possible. In order to avoid a similar situation it is necessary to approach seriously approval of differentiation of functions and receiving financial results.

For risk minimization select a special transient period which usually lasts two-three months from the moment of signing of the contract. Within this period audit is booked, processes of interaction with the outsourcer are fulfilled, all requirements and notes of the customer to the project gather, parameters of services and a pricing model are specified. After the end of the test period the outsourcer prepares recommendations about elimination of the existing problems and holding such actions which will allow to receive the desirable service level.

Main objective of transition to outsourcing, we will emphasize once again — cost reduction. And to understand whether work of the supplier is effective, whether there are positive results from joint activity, it is necessary to compare costs for the organization and service of IT infrastructure before involvement of the customer, it is important to consider all items of expenditure in this direction, including laid on and organizational, to define as the hidden costs connected with idle time of IT, and possible, connected with information security support and emergency situations.

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