Outsourcing Strategy on the Example of a Successful Company

A booming trend, company outsourcing (look at https://idego-group.com/staff-augmentation) or outsourcing of resources has become a fairly common practice in the professional landscape. According to the Cegos Observatory, outsourcing is in fact constantly expanding and in the first quarter of 2014 alone, there were already almost 630 million euros in contracts signed. While this practice is becoming more and more common, it is not without risks, however.

How Outsourcing Strategy Leads the Way

Nowadays, the use of outsourcing (all types of outsourcing combined) has become very common amongst businesses. However, the level of maturity of the market depends on the sectors concerned. For example, IT and engineering lead the way with 90% of the entrepreneurs surveyed claiming to use it. Next come construction with 75%, banking and insurance with 78%. Functions vary depending on the size of the business. For the smallest, the process primarily concerns logistics and transport, while large companies mainly value recruitment (particularly executives), consulting and IT infrastructure. In addition, the number of employees directly influences the degree of outsourcing that the company allows. Companies with less than 50 employees, for example, outsource on average 57% of their services. Those between 50 and 100 do so at 79%, while the figures for the largest companies reach 80%. The quality of the service and especially the speed of reaction of the external provider are the two main points that companies examine before outsourcing.

Example of Successful Outsourcing Strategy

The Managing Director of a telecommunication company discusses the conditions for tackling the outsourcing of all or part of a company’s IT.

If the outsourcing of an IS has many advantages such as availability, security, adaptability of solutions to business needs and reduction of installation and maintenance costs for infrastructures and applications, such an approach requires an implementation methodology.

Audit of Existing IT

Identification of externalizable applications and employee involvement are the three pillars of a successful IS outsourcing project. By opting for the outsourcing of all or part of the IT system, the company aims in offloading issues related to the management and maintenance of infrastructure and applications (business and communications). Acquisition, security and scalability of servers and business applications will no longer be an issue. Additionally, there will be no more over-investment in technical capacities (purchasing servers, network infrastructure, etc.) to anticipate future business developments.

Audit the Existing IT Infrastructure

To succeed in such a project, it is first of all necessary to audit the existing IT of the company: inventory of infrastructure and applications, number of users, identification of their profiles, measurement of technological maturity, volume of data available, etc.

In addition, to have an objective vision of the needs of the company in terms of the outsourcing of its applications, it is relevant to ask a number of questions: does the application require significant specific development? What functional and financial benefits can we derive from the company outsourcing of such or such applications? Does the application contribute to the current and future needs of the company or is this migration likely to lead to a rejection of users?

The company also pays attention to the legal aspects. The company must have a good knowledge of its regulatory, financial and administrative constraints to frame the specifications with the service provider.

Identify “Outsourced” Applications

At the end of this audit phase, the company defines the scope of the project and prioritizes applications that can be quickly outsourced, those that will be outsourced in the more or less near future or critical applications that it is preferable to preserve internally. .

It is, for example, customary to outsource data storage and backup, the website, all messaging and communications services (collaborative tools) and applications that are not the core business of the company: HR, CRM, ERP, purchasing.

Involve Employees

Another highlight of outsourcing of the telecommunication company is user involvement. Such a project emanating from management and appearing as a top-down decision carries with it all the seeds of failure. This is why it is imperative to mobilize all employees from the very start of the project and to rely on the most convinced to bring the most resistant and support them in their skills development.

In summary, the outsourcing operation is a strategic choice that requires good preparation in order to create ideal conditions for success. For example, it is essential to exchange opinions with all the personnel who will be affected by structural changes. Furthermore, it will be necessary to set up a precise and established long-term agenda for both the company and the service provider. Finally, it will be necessary to establish qualitative and quantitative control tools to control company outsourcing.