Outsourcing While Holding on to Knowledge

As IT outsourcing of all types is becoming pervasive all through the world, operational complexity and risk increases accordingly. CIOs are well-acquainted with some kinds of risk. For example, securing a more extended enterprise, always come first in place of mind. Meeting a business case, obtaining a return on investment, are other financial and economic risks. 

Many companies usually lose ready access of those individual who are most skilled about business; some are lost to the new outsourcing units, others to turnover. Companies also risk losing opportunities for insights and innovations born as a result of working together in a joint intellectual effort, because fragmentation of a strategic and unified view across the organization inevitably occurs in a multiple-provider model.

In order to contend against the risks of lost knowledge, a CIO must thoroughly consider the existing staff and retain the highly skilled individuals to serve the two remaining teams---
(a) The retained operating staff.
(b)  The outsourcing governance team.

The retained operation staff will own the strategy, control policy-setting and retain expertise in every area being outsourced: the data center, infrastructure, telecom and so forth. 

The outsourcing governance team would be in place during the service provider evaluation and negotiation process, and would continue in this role after the transaction is executed and complete. 

As more organizations are migrating towards a multiprovider model, they find difficulty in establishing an organizational view of performance, producing detailed cost and budget analyses, evaluating service levels and effectively resolve performance problems. Creating an enterprise wide view can be labor-intensive and costly.

To combat the risk of lost institutional insight, most companies outsource their work successfully to ensure collaborative operational excellence across the various entities and service-level agreements. Companies in such multiprovider environments should create a centralized governance team or a center of excellence for the IT organization, and implement governance best practices that will provide frameworks for the management of operations, finance and the overall relationships among the providers.

New technology-based tools can assist in managing the performance in a multiprovider environment and guard against the lost knowledge and insight.

• Integrated governance and communications tools can help CIOs to manage and view a portfolio of shared services and outsourcing relationships across the organization.

• More to the point, these tools can also provide ongoing and rapid insights into the health of the key management areas of all outsourcing relationships in a collaborative environment across multiple service towers.

• These tools can provide a cross-enterprise view of performance, budget, business case and cost tracking and planning. They can also provide a near-real-time view of service levels and critical outsourcing contract terms.

• Governance tools can support effective two-way communication among business users about requirements, successes, value, performance reporting, chargebacks, demand forecasts and issues relating to the various service providers.

If these tools are implemented properly as part of an outsourcing strategy, companies should no longer worry about becoming an "outsourcing failure" statistic, as they will be adequately managing a large share of their risks.