Why outsourcing needs a warm body and the customer is king

Why outsourcing needs a warm body and the customer is king

– Ryan Coombes, Gyrocom’s Technical Director talking about what’s really going on in IT departments wrestling with outsourcing

ryan interviewSo what are the issues with outsourcing IT offshore?

Cost is always a major driver around IT and outsourcing to large vendors has traditionally been seen as the cheapest route. But cheap is not always best – and sometimes is not always cheap! Contractually, it’s almost impossible to calculate what the real costs will be over the lifetime of a five-year contract, especially when there are issues and things go wrong; which of course they do. It’s not really a very satisfactory solution to have someone at the end of a phone, they’re not invested in the same way, and unfortunately there is often an attitude of ‘it’s not my problem, I’ve done my bit.’ If you’ve got people that are working together on-site they become invested. There’s a team spirit of getting things done. You just don’t get that outsourcing offshore.

So why isn’t it always cheaper?

Contracts are fraught with danger; they’re always the things that catch people out because they are so complicated. There’s always the small print; you have a base service and then anything outside of that is of course an additional cost. So it might look cheap to start off with, but the costs soon escalate and that’s really difficult to predict.

So what advice would you give?

Anyone who is considering a big outsource contract needs to understand how they deal with change outside the basic pricing because that’s where the large outsourcers make their money. They come in low, and then anything outside of what is very basic stuff is then chargeable work. For example, a simple firewall change is considered a complex request because it’s a firewall change, and then, as things develop from there, the scoping of the work ends up being chargeable. Everything outside of what is in contract becomes a chargeable piece of work. My advice is make sure you understand the contract in detail before engaging, and make sure that what’s written in there is actually what you need. Make sure you have people on the ground, so you have a face to talk to when things aren’t going well because there are going to be problems along the way…it’s infrastructure after all!

So what does Gyrocom do differently?

So where we’ve been winning is the network space, we’ve been brought in to work on a specific project or sort out a particular problem where the client needs a tangible person with expertise. We offer a different model of outsourcing, our personnel are on-site and work as part of the team. We’re not a big outsource vendor so we start on a small project to demonstrate our capability and go from there.

We’re also agile; we adapt to client requirements faster and build the service around them and their needs. It sounds insane, but a typical large outsourcer’s philosophy is “This is the way we work, and you need to change to work the way we do because this is the way we work”. Can you imagine that approach being acceptable in any other business arena?

An organisations focus is not on the delivery of IT but on whatever business they’re in. We fill the gap in where larger outsourcers are falling down. Offshore Outsourcers don’t have people on-site. We provide that. They don’t have an end-to-end view of the environment or the specialist knowledge, and organisations need people with this knowledge to fix problems, especially in complicated environments. Typically companies will just jump around from one outsourcer to another thinking they’re going to get something different, but they simply experience the same thing again. I understand that it’s difficult for the bigger companies as it requires a change of approach, but it’s frustrating for us because we know we can do better, we know we can help.

So what are the business drivers and how will this impact IT outsourcing?

Everyone’s trying to address an age-old problem; the network has always been the weakest or most expensive link.

You just have to look at the way we are consuming IT to see the degree things are changing. Imagine trying to drive an iPhone with all its applications on a dial-up modem. It would be inconceivably painful! But in effect, that’s what a lot of companies are trying to do. Their bandwidth hasn’t caught up with their data demands, which is why they turn to cloud services and bring in bigger links at great expense. We can apply this analogy to retail; organisations are now looking to do so much more in store and drive so many additional applications to a single location on the equivalent power of a modem. Organisations demand more throughput, the kind of throughput home broadband can deliver to power our digital TVs and IOT devices. The corporate world is still playing catch up in this respect.

There is a digital transformation, using IT to drive business. It’s the biggest change we’ve seen in a long time on all fronts. The cloud is now an embraced reality and over the last 3-5 years we have seen businesses appreciate the competitive cost of resisting change. It’s a consumer’s world now. If businesses don’t adapt to the way their customers want to consume their services, they’ll go to companies that will (or already have). Organisations must engage with customers across all of the channels they use, a number only set to increase.

Infrastructure has been static and slow to catch up which is why we’re seeing an increased adoption of the cloud. Everything is being driven towards the software layer, where automation and the intelligence lies. The networking industry is changing. We’re leaving behind the old world where it’s all commands and plug-in cables and moving towards plug-in devices that can dial home and auto configure themselves.

What can be said for traditional large, offshore IT outsourcers in this new world order? I personally don’t think they’ll be able to provide clients with all that they need in this new environment. I think it’s going to need to be structured differently, perhaps where customers, organisations like ourselves, and larger outsources all work in partnership. The large outsourcer can provide the basic underlying function but there’s going to be a demand for really knowledgeable people with the specialist skills onsite, this is what Gyrocom delivers.

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Posted by Ryan Coombes

Technical Director at Gyrocom.