Realities of IT Outsourcing You Need to Consider

Despite the fact that IT Outsourcing is growing each year, even in places like China where English skills need to scale higher, many are still outsourcing some or most operations run by their IT Departments.  Whether be it a permanent or temporary fix to bridge the gap among cost, quality and manpower – outsourcing may seem like a salvation to many, that is if you are not too overeager to miss the real cost of outsourcing IT.  For example, if you are to move your IT functions offshore, you need to consider travel cost to the country of your choice, not to mention, other costs that may involve directly ( or indirectly ) with running your operations there.

Calculating Beyond the Real Cost

While you may think it will cost you less in the long run to get a third party service provider, you may have to consider the time factor when it comes to their familiarity with how your system and network really works.  If not, that can mean additional costs in training.  Then, there will be cases when you need something done a.s.a.p. and your outsourced IT provider must be inept to deal with issues right away, or you can suffer delay time which is not really good for any business.  Whether you’re outsourcing locally or offshore, you have to consider the worst case scenario to prepare yourself for the unexpected, just in case.  The problem is that plenty of contracts are sugar-coated and misleading, and no matter how urgent your needs may be, it helps to see a bigger picture that includes the real cost + long term benefits of having an outsourcing partnership.

Outsourcing the Human Liability

What drives companies to outsource these days is having access to first-rate IT expertise and resources that will yield more results and cost less.  Still, one must consider that anything, or anyone, can become a liability.  It does make sense to have your fine print well-defined, as well as backups, in case data is lost or stolen.  Yet, the question here is how much will it cost you when downtime happens because of these?  Will it cost you more if your team hasn’t worked for an entire day ( or week ) because the system crashed?  Is your team motivated enough to continue with your cause, efficiently?  Have you even considered the impact of cultural barriers that may lead to communication gaps?

You may argue that any business is a gamble and it comes with risks.  Keeping a close eye is just a start and no matter how providers may offer free consultations, it’s only a sales pitch.  It will always come down to long term benefits and what outsourcing will really cost your IT dollars.  Choose wisely!

When Less is Truly More

Whatever you are offering out there, know that your product or service exists to provide a real solution to a real problem.  Take note that I’m highlighting the word ‘real’ – which is something that everyone is looking for these days, from testimonials from real people to authentic information in your website.  Gone were the good ol’ days when your home page looks like a digital brochure that people can navigate through; you have to connect with your audience and learn new perceptions in this social media age.  But, what’s more important is learning how to segregate the clutter from what’s necessary and when you do, you will be just a few steps away from creating an irresistible product that speaks for itself.

Building Value and Cost Containment: When Going Lean Matters

These days, your customers’ voice matters more than ever and involving them in creation of new products/services may seem appropriate… and when you do build it, they might want something else.  So, how can you accelerate the brainstorming process for your business to grow faster in this age of uncertainty?  The answer may just lie in going lean – as in, the Lean Business Model Canvas.  Finding a niche is crucial as it gives you a chance to focus on a specific target market.  You don’t want to be everywhere serving everybody.  This will mean you have to get the best bang for your buck with a productive process wherein you can maximize creation of value for your customers with fewer resources, therefore, eliminating waste.

Developing Strategic Partnerships with a One-Page Plan

The lean business model is not only ideal for startups or small businesses, but it can also be applied to outsourcing as well.  The key here is to optimize technologies, manpower, assets to provide value-added products and services to customers.  Think of it this way, customers are smarter these days and to meet their ever-changing demands, you have to respond in a lightning speed where high quality + lower cost = productivity.  Many may have this misconception that this lean concept is only suitable for manufacturing and that’s not really the case.  It may take time getting used to shifting from traditional business models, no doubt.  But, the beauty of this model lies in its simplicity and flexibility that help you identify what matters most to your business right now, in just a page.  You can easily identify your key partners, key activities, key resources, cost structure, customer relationships, customer segments, channels, revenue streams, and value proposition – and arrange them accordingly as you can see in this lean business model canvas template.  Now, that’s giving you a bird’s eye-view, minus the complications of drafting a 30-page business plan.  You can then create a flow of process and methods to achieve a viable product, minus waste, and perfect that value you’re creating.

At the end of the day, the only way you can innovate ‘innovation’ is through continuous improvement and this time, you may simply have to go lean… and mean.

When offshore outsourcing has been blamed to contribute to unemployment in the U.S., it only makes sense for large businesses to declare that they are creating more work at home… or do they, really?  Perhaps, lack of transparency has compelled the move for rallying this anti-outsourcing bill that will seek to punish those who are moving business offshore.  It only makes sense, as a protectionist act that any country will be compelled to do when the economy is down.  By offering local government incentives, this may drive companies to look for talents on shore – from crowdsourcing, rural sourcing, insourcing to near sourcing.

When Opportunity Lost Means Opportunity Gained

As outsourcing deals get smaller, we can see new price models that are tailor-made to fit every client’s budget and needs, no matter how small their enterprise really is.  Last year, IAOP (International Association of Outsourcing Professionals) predicted that we will see a surge of BRIC countries – Brazil, Russia, India and China, as major outsourcing hubs.  There will be more room for innovation and outsourcing to work hand-in-hand when it comes to technologies, collaboration and strategy – for coming up with value-added services in a higher demand, more than ever.  A stronger emphasis will be set on various social media platforms in the hunt for global talent and we will expect to see a rise in job matching/freelance portals on the Web.

Outsourcing: Embracing the Risk

It may be too late to bring back jobs on shore and there are still many who are taking the risk to outsource some or most functions of their businesses, offshore.  And to outsourcing vendors, they may just have to take on the risk of signing for several smaller contracts than going for a large deal.  You may not like to hear it, but lower labor cost is always the top driver for companies to consider offshore outsourcing.  You may put a lid on top of this running water, but it won’t hold businesses off from outsourcing, though you can slow down the process.  In the end, one has to ask:  Is outsourcing the cause.. or the effect of a much bigger problem out there?

Will 2012 be the end of offshore outsourcing?  How about 10, 20, 30… 50 years from now?  You may have to see the world in a bigger picture – climate changes, world population, global economy, inflation, technology shift and so on.. It’s really too soon to tell..

The Adoption of a Cloud Strategy

It will all start with an agile process involving CIO’s… down to your sales, marketing, HR and other departments involved in the so-called ‘change’.  Here is where the CIO view the blueprint of this cloud strategy so the platform can integrate very well with various business functions in the organization, where cost is not only reduced, but making the transition less complex for everyone.  Sounds too easy?  Yes, it may be a drag or even a major pain – and business executives must lead the way in what you call a leadership in the clouds.  It all boils down to shared vision and collaboration so that everyone can participate in this change that will affect the business in the long run.

It’s not really surprising that cloud computing is here to rule, no matter how people may have varying opinions about the subject.  Gartner predicts that by 2015, most organizations will have migrated to the cloud.  It’s an adapt-and-adopt game out there when it comes to a cloud strategy, where you adapt the technology and you adopt its use in your business functions.  It’s important then to have a careful planning process before making that giant leap.  Security is still a major concern for many who are having second thoughts though, and to illustrate, here’s an intriguing infographic about it.

The Age of IT Industrialization

There is a growing demand for private cloud services and though the pay-per-use model may not be cheaper, if you want your business to scale globally on the clouds, you must be realistic with what you’re actually getting for in return.  You need to assess which applications you can move to the cloud and which ones should be managed in-house.  With plenty of vendors to choose from, you have to scrutinize each one closely to make sure that they meet your requirements.  Yes, there will always be some risk and having a contingency plan can help along the way.

This is just scratching the surface of migrating to the clouds.. and getting ready to make a change is not a one-off deal, but something that takes years to master and managed every day.  In the end, the goal is to have free flow of information across regional to international borders.  The question now is:  “ Are you ready to rethink your cloud strategy.. or start one, if you don’t have any yet? “

An Open Invitation to a Better Outsourcing Relationship

What makes a winning outsourcing relationship these days?  The key may lie in our flexibility and willingness to invest in expertise that will make things work for our business.  If both parties are open and honest, it will pave the way for problem-solving scenarios that will create positive results for both clients and outsourcing service providers alike.  If there is an issue of trust when the economy is barely recovering, perhaps, both parties can meet halfway in addressing needs and resolving issues to set expectations right in the first place.

This will then lead to this personal sense of accountability where there is just this initiative to create solutions for the success of the outsourced project.  It’s a chain reaction, with the benefits, if you would like to call it as such.

Learning to Survive in the Outsourcing World

There have been recent fears about Obama’s outsourcing bill that can have significant effects in major outsourcing hubs like India and the Philippines.  If this is viewed as an opportunity instead, where helplessness is transformed into power, one can survive this by seeking out new and unexplored terrains where outsourcing can still thrive.  There is a shifting trend to insourcing once more, where clients are wanting to bring back roles in-house.  There will be short-term gaps in contracts and yet, if one will commit to improving the quality of service, processes and managing business cost – one can still compete in times when businesses are looking to add more value, without adding extra costs.

If there’s going to be a slowdown in outsourcing in the coming months, what we can do for now is see this niche in a bigger picture.. so we can have better visions of the present situation that will help us address it in the future.  Will sending more work to outsourced providers result in a mutually beneficial business relationship?  In the end, change is constant and just how you respond to it makes a huge difference in the world.

Cloud Going Mainstream: The Ultimate Dream

Last year, we’ve seen cloud computing kick off and we’ll surely see huge opportunities for web-based businesses and startups to address critical concerns like security, and come up with a custom fix.  When mobility is the future of technology, and devices are becoming more sophisticated each year, there is a need to make the cloud simpler to adapt to the new marketplace.  In fact, there are predictions on the Web on 10 cloud computing startups that will have a chance to be a blockbuster this year.

The Cloud as an Agent of Change

There’s no denying that cloud computing will change how organizations work, especially when workers are not sitting anymore at their desks all day.  So long as you’re connected online, you can practically work anywhere.  A shift to the clouds won’t be the major solution to your business pains, and yet, it brings with it a room for agility – where key people in your business can make critical decisions faster ( and most of the time, more efficient as well ).  It’s a slow and steady adaptation to the cloud these days, without putting a huge dent on the normal workflow process, unless there are bugs to deal with or when you’re running a large enterprise.

When Team Collaboration Goes 2.0

Thanks to cloud computing, virtual teams can communicate easily and become virtually productive almost anywhere in the world.  The options seem to be limitless here.  The future for private cloud space also looks bright as we will see new service offerings that are secured from cyberhacks, among many other things.  As these solutions become seamless, so will virtual collaboration be.  Geographical barriers have been crossed and this may take time getting used to, like switching from horses to high-speed cars.

There’s no denying the fact that cloud computing saves you on cost of having a complex software infrastructure and maintenance by your in-house IT staff.  Mobile technology is real and this time… we’ll be seeing clear skies where it concerns the cloud.

An Open Invitation to Brand Recognition

On the contrary, quality and support levels for open source applications are not really substandard, as many might have believed.  There are open source projects fueled by community discussions for further improvement and as such, the level of quality given can mean on-the-spot customer satisfaction for brand recognition.  To make it simpler, the more bugs you fix quickly, the more likely your customers will stick to the super glue of your brand.

Open Source: The Amateur’s Cove?

Just because programmers are collaborating to work 8 hours a day, 5 days a week from scratch to build an open source app doesn’t mean it’s a hobbyist thing.  Did you know that a Gartner study has predicted that 99% of Global 2000 enterprises will include open source software in their portfolios by 2016?  That’s up by 75% in 2010.  Before you even think that big companies are not into the open source thing, just take a stab at big names like Google, Facebook or Amazon who are taking advantage of this platform for their IT needs.  Definitely, it’s not a noob’s thing!

Expanding Your Market More than the Freebie Concept

There are many reasons why open source software projects are booming and these can be free licenses, freedom to own and change the code, continuous improvement, code stability, and the ability to ask your community for help.  There are downsides as well and just because something is free doesn’t mean it has zero cost.  Also, maintaining the quality of your code is a top priority.. but that doesn’t have to stunt your project.  Keep in mind that at the end of the day, there’s always a huge difference between good and great, so you need to have experts on your side – no exceptions.  Size doesn’t matter these days; speed does.  When your community takes time to answer queries you’ve got for your open source project, a team of in-house or 3rd party experts who are ready to handle that issue won’t threaten the success rate of your work.

That’s when you get the chance to shine above the rest.  So, if you think that there’s no money to be made in open source software, think of IBM who have grown their open source products.  They’re not in a danger of going out of business anytime soon.   Quite the opposite though, as Fortune 500 companies are embracing their Linux technology for mission-critical applications.. because it’s more stable.

The only question left now is: How open are you to change?

Is Having a Global Mindset Your Ultimate Key to Outsourcing Success?

If you’ve watched the controversial TV series, Outsourced, you might as well know that adapting is more than a skill these days; it’s a must if you want to tackle problems together with your outsourced team and have an almost seamless collaboration process.  You may be too enthusiastic to work, only that it leads to frustration just because you forgot to do your research on your outsourced team’s culture, which affects the way they think and do things.  We are all stewards of global capital these days and having a global mindset is a social skill, just as important as technical skills.  How open are you to working with people in different cultures?

Harnessing the Collective Brain

One of the major impediments when it comes to success in outsourcing is not only the case of innovation, but also of the ‘Us versus Them‘ mentality that defeats the whole idea of team work in the first place.  This makes it easier to blame somebody just because s/he is from a culture totally different from yours.  Just how well you understand the culture beyond your own is crucial in building the trust you need to make your outsourcing efforts work.

Get Out of Your Bubble

You may not be too eager to learn more about the culture of your outsourced team, and the challenge here is to stretch yourself just a bit and do more than just trying to get work outsourced into foreign countries.  What are the customs of the countries you’re outsourcing to?  When you overcome this cultural divide with your willingness to learn, you can be better attuned to the pros and cons of taking your business on the global arena.

When the office doesn’t anymore define the place of work, it doesn’t matter if your workers are on the same building, a floor below, or on a country thousands of miles away.  It’s a hot trend that businesses work with talent from any place on the planet, attracting an untapped gold mine of skills, of the best people you can find for your team.  The economic pie is growing and you have the power to make things work.

The choice is yours.  Are you ready to stretch your mindset this 2012?

Beyond Predictions and Observations

Whether major acquisitions will be made of a western service provider by offshore firms is still a hot topic for tomorrow.  Still, the threat of recession will likely hold back buyers into signing contracts, until they’re certain of the stability of things.  And yes, cutting down cost is one of the driving force in today and tomorrow’s outsourcing scene.  It’s not anymore a question of size, but speed, and we might as well see a correlation in the rise of outsourced workers to freelancers as new technologies make remote working almost seamless.

Embracing Risk

In the pursuit of excellence, I believe that there will be a race to customer-centric model when it comes to business, and we’ll surely see an open invitation to innovation and creativity.  Social intelligence is crucial though, where businesses and customers need to connect in a deeper level than meets the Web.  Will collaboration work this time across different cultural settings?  I can’t wait to find out…

It All Starts With a Question

Are you willing to push beyond your limits… to make a difference this 2012?  Are you ready to learn from your mistakes now so you can achieve your goals faster?  Whatever you have in mind for the new year, it will always help to make a top ten list of priorities – no matter how cliche it seems.  As Oprah Winfrey said, ” Cheers to a new year and another chance for us to get it right. “  So, take your best shot…

We wish you and your loved ones a Happy and Prosperous New Year.  The best of health, wealth, wisdom, and happiness all year round! – Shaleen Shah, CEO & Founder, and the entire Seventhman Team

The Not-So Paradigm Shift

It’s tough to focus from outsourcing results to business value, and calculating such is still a work in progress.  So, how do we even begin?  It may have to start with the dreaded ‘I’ word, as in: Innovation.  There are plenty of reasons why businesses outsource and it has been a common practice to outsourcing administrative work – the cost effective way.  But more than calculating the financial benefits of your outsourced contract, what exactly are you getting when you opted to get more for less?

Scalability or Competitive Edge?

Outsourcing is not really new and over the last decade, the amount of work outsourced expanded dramatically.  What can’t be outsourced these days?  Still, many are bogged down in the management of these outsourcing contracts that take them away from innovating processes to adding long-term value to the business.  Most outsourcing vendors focus too much on the cash-cow syndrome, trying to cut deals and bait clients with the lowest cost imaginable.  Yes, this can be great for competition, but it will not bring sustainable value in the long run.

Quantity Doesn’t Mean Success

The real business value of outsourcing comes into play when the quality of the results or work gained contributes to meeting corporate goals, or even exceeding it.  You shouldn’t measure your success with the number of outsourced workers or the number of transactions made by the vendor of your choice.  Are you practicing due diligence in partnering with your 3rd party provider?

Do You Have What It Takes to… Change?

When things go wrong, are you willing to abandon the cause?  Perhaps, it’s high time to leave processes and technologies that don’t deliver results.  Have you monitored your key performance indicators lately?  Issues do happen in outsourcing, but it can be detected and resolved before it morphs into a cancer that will eat on the health ( and wealth ) of your business.

The trend on outsourcing looks good and there’s no limit to what you can outsource today.  The challenge now is coming up with new and creative ways for outsourcing to add value to your business, and make sure that efforts made will deliver results with stunning consistency.