On Wednesday 19th June, we delivered a CIO Roundtable from our Manchester City Centre offices focusing on how ‘SMEs Can Challenge Big Business Through Effective Outsourcing’, which was attended by senior IT leaders and business executives from a wide range of organisations.

During the interactive roundtable, attendees shared both their successes and war wounds of how they’ve embraced outsourcing as a way of adapting their approach to non-traditional delivery models in order to achieve a competitive advantage.

Adam Darr from Arrk, kicked off the proceedings by setting the scene as to how outsourcing should be seen no longer simply a cost-cutting tool, but instead is delivering true business value through measurable benefits such as enhanced service quality, reducing time to market and driving broader transformational change.

 

 

Achieving Success Through SMART Outsourcing – Gary Gautier, Director of Customer Success, Arrk

Gary shared his experience as both an ex-CTO as well as from leading customer projects at Arrk for the past 8 years. He highlighted through practical examples what he sees his secret sauce to outsourcing success is, with a key ingredient being to treat your ‘x’ as a partner and not a supplier. Also, how establishing trust and transparency on both sides will lead to a much more productive and fruitful relationship with value added for both parties, that’ll therefore help you deliver against company objectives, rather than making your business challenge ‘someone else’s problem’.

Gary’s secret sauce to SMART outsourcing includes:

 

Leveraging Outsourcing – David Threlfall, Group IT Director, Victrex

David then discussed how he has leveraged outsourcing to make his internal IT team at Victrex more effective and has helped them achieve an aligned business and establish a technology 3 horizon strategy. He explained how outsourcing has allowed him to re-align resources to make them more effective, rather than simply replacing people. And also discussed how it has enabled him to change the IT conversation from technology to core business objectives, including driving revenue, increasing profit and reducing risk.

A key theme of David’s insight was around the importance of effective change management when introducing outsourcing for the first time, for example he transitioned individuals from being traditional developers into architecture roles, and the importance of visibility and governance of the delivery process so that success can be both measured and shared.

David’s outsourcing highlights included:

• Digital is a must have and not a nice to have. To be respected you have to be in the game.
• Outsourcing can free up brain space to focus on making things better, rather than simply run.
• Don’t just focus on outsourcing external programmes – internal digital ecosystems can benefit as well.
• There will be hidden wins you don’t expect e.g. more predictable and improved support levels.
• Never lose sight that it’s all about people. Change can be worrying, so you have to prepare to manage it.

 

If you want to discover more about how outsourcing can benefit you, why not download our Outsourcing Brochure? Or if you’re interested in our next event, please click below…

We’ve already looked at Why SMEs outsource and What SMEs can outsource in order to level the playing field against larger organisations. So this article will look at the final piece of the jigsaw and will focus on the How to undertake smart outsourcing – by choosing the most appropriate development model to drive your operational and business benefits.

The good news is that you can now pick and choose not only what you may want to outsource – but also how you do it. Each organisation is unique, and your outsourcing strategy must be formulated based on a clear understanding of your specific situational factors. Getting the basics right from the start by addressing the key considerations against your decision drivers, is key to ensuring long-term benefit and success.

 

Project Outsourcing

Traditionally, a project-based approach is considered the most appropriate option for companies with irregular, one-off, and pilot projects of low to medium complexity with well-defined requirements and deliverables. However, it is also how some organisations initially dip their toe in the water with outsourcing. With minimal exposure and risk, it gives you the opportunity to judge both the quality of the delivery partner as well as testing the concept.

Companies often choose this approach as an extension to their existing development capability, for instance, when there are capacity issues (the in-house team are unable to allocate the appropriate resource to deliver within the often short deadline) or there’s a requirement that’s outside the domain knowledge of the core team. With project outsourcing, all work is fully project managed by the outsourcing partner who are responsible for the quality of delivery of the required outputs.

 

Programme Outsourcing

Typically required to support business and digital change programmes, this model is ideal for companies who are looking for support on longer-term engagements. It’s also great for companies who need to extend their development capabilities with highly-qualified and skilled teams of developers and other IT professionals such as designers, UI/UX specialists, business analysts, project managers, testers, and more.

Many project-based models morph into this type of long-lasting relationship once their outsourcing partner has successfully delivered on smaller projects. The outsource partner would normally look to establish a consistent team reserved for each client, so that they develop a deep understanding of the company’s business objectives and can provide strategic support, rather than simply act as a tactical delivery arm. When multiple suppliers are involved in a programme, they can also provide 3rd party management to remove the headache of having to co-ordinate all the individual elements.

 

Virtual Outsource Delivery Centre (VODC)

As more and more businesses are looking to gain the advantages associated with outsourcing their delivery, one of the key considerations is around the control of the processes outsourced to the new provider. However, with a Virtual Outsource Delivery Centre (VODC) you get the best of both worlds. You can ramp up your capacity and skillset while still retaining control over the delivery. It’s a true extension of your existing team where you directly manage the individuals and their outputs, but without the management overheads such as HR, recruitment, payroll and office space.

However, the VODC model is a framework that can provide the appropriate level of support, depending on how much management bandwidth or experience you have at managing dispersed teams. An additional key benefit of the VODC model is the flexibility around resourcing. There is an option to provide resource to enhance your existing capability or you can look to outsource your entire delivery requirements (or literally anywhere in between). Should your requirements change, or you need additional support for specific projects, then the team can be flexed up and down accordingly.

 

 

Nowadays, companies sometimes opt to use a hybrid model to balance technologies and arising needs. Combinations of models are helpful to gain a specific value from each of the selected models. It is important to understand the type of project and its entire scope to fully assess how each model can be of benefit and which one is the best fit.

In a previous article we looked at how ‘SMEs Challenge Big Business Through Outsourcing’ and how it is levelling the playing field somewhat for SMEs, who simply can’t afford to match the in-house support services that larger companies maintain. By helping them act ‘big’, giving them access to the same economies of scale, efficiency, and expertise that large companies enjoy, leading practice SME organisations are using outsourcing to drive transformational change and improve business results.

 

Increased Flexibility Gives You More Options

A major shift in the outsourcing arena has also seen organisations benefiting from the increased flexibility in the options of ‘what’ and ‘how’ you can outsource, which is the focus of this article. Traditionally, outsourcing has been considered to replace an entire department like HR, or a particular function e.g. payroll. However, it’s now possible to enable your organisation to access and leverage the appropriate expertise to support your overall business strategy and goals across the entire digital lifecycle, either as an ad hoc or longer-term strategy.

 

Strategic Digital Consultancy

Most companies have very clear organisational aims and objectives, but these do not always include digital technologies as a strategic enabler.

Strategic digital consultancy engagements establish a common understanding amongst your executive team as to the vision and objectives and future roadmap for your digital programme, as well as assessing your organisational readiness to effectively leverage transformational change.

 

Architecture and Design

Each year, organisations around the world face astronomical project failure rates, often wasting millions of pounds per failed project. Projects most commonly fail because there is a lack of attention and efforts being applied to key project performance factors and there is a poor suitability and scalability of the current IT landscape from both an environment and software architecture perspective. Having an independent party review your current landscape, provides you with an unbiased ‘outside in’ view and can help you sharpen the focus on IT development projects, shaping the design of specific digital outcomes.

 

Development and Migration

Getting software into the hands of users as fast as possible and leveraging new technologies such as the cloud is a key business priority. By shrinking time to market and embracing change, you can respond rapidly to market changes and sustain a competitive advantage. However, this can put pressure on capacity and highlight capability issues within internal resource, which may increase delivery times. Outsourcing projects or full programmes of work gives you instant access to a global resource pool and enhanced technical skillsets. Plus, if you want to mitigate risk, there are outsourcing models available that allow you to manage and direct the resource, without incurring the fixed costs of overheads etc.

 

Support and Maintenance

Technology and the business environment are two of the fastest changing aspects of our world. Through outsourcing your support and maintenance, it ensures that you continue to get the most out of your investment, that it matches your business requirements of the time, and your employees know to optimise the systems that they use. Outsourcing can also help your business to shift its focus from peripheral activities toward work that serves the customer. Routine tasks such as updating legacy systems and maintaining your cloud environment can be transferred to free up valuable time for internal resource, so they can focus on innovation.

 

The good news is that you can now pick and choose what you may want to outsource and for how long. Each organisation is unique. And your outsourcing strategy must be formulated based on a clear understanding of your specific situational factors. Getting the basics right from the start by addressing the key considerations against your decision drivers, is key to ensuring long-term benefit and success. Need some guidance on which delivery model best suits your business? Download our Outsourcing Brochure now.

It’s that age-old business mantra we’ve been hearing since we can remember – the customer is king. It highlights the importance of customers (and potential customers) in every business. Traditionally, it’s a rule that means your company promises to provide good customer service. But with the current evolution on work and business settings, ‘the customer is king’ means more than just subscribing to good customer service, it means really practising it too.

We live in a fast-paced ‘everything now’ era. Endless tech-powered innovations are giving customers more choices than ever before. Therefore, companies must adapt, improve, and deliver solutions faster to stay competitive and meet ever-changing customer needs. This nimbleness, and the ability to switch tack to take advantage of a new opportunity, is playing into the hands of SMEs, as they often don’t have the same rigidity in processes and policies in comparison to their big business counterparts. Plus, they’re also now benefitting from a strategy that has traditionally be seen to be reserved only for large organisations – outsourcing.

 

Levelling the Playing Field for SMEs

 

Outsourcing is levelling the playing field somewhat for SMEs, who simply can’t afford to match the in-house support services that larger companies maintain. It can help them act ‘big’ by giving them access to the same economies of scale, efficiency, and expertise that large businesses enjoy. A major shift in the outsourcing arena has also seen organisations benefitting from the increased flexibility in the options of ‘what’ and ‘how’ you can outsource – there’s now a vast range of business benefits above and beyond the traditional well-known cost efficiencies. No longer do companies have to outsource entire divisions, such as its entire IT department, instead they can leverage expertise and capacity on a programme or project basis, with the option to scale up and down in line with business requirements.

A recent survey published by The Times, found that while cost, enabling core business functions, and solving capacity issues are primary drivers to outsource, leading practice SME organisations use outsourcing to drive transformational change and improve business results.

This is combined with aligning outsourcing agreements to tangible business benefits that have a powerful impact on their growth, productivity and the bottom line, which are often achieved due to the introduction of innovative new approaches or speedier go to market models.

 

Smart Outsourcing – Driving Operational and Business Benefits

 

Each organisation is unique. And your outsourcing strategy must be formulated based on a clear understanding of your specific situational factors. Getting the basics right from the start by addressing the key considerations against your decision drivers, is key to ensuring long-term benefit and success. From improving user experience and lowering the cost of delivery, to delivering new capabilities and decreasing transaction time – there are many reasons why SMEs go after a outsourcing delivery model.

At Arrk our experienced consultants lead you through the process to identify how you can best leverage outsourcing, to make sure it has the biggest impact on your growth, productivity and bottom line. In our next blog, we will share with you how some of our customers have radically changed their operating models and have achieved incredible results through outsourcing arrangements.

 

One size doesn’t fit all when it comes to outsourcing resource. With four areas where we can assist your digital growth, take a look at Arrk’s outsourcing options.