The concept of outsourcing used to be simple: in an effort to cut costs, companies in developed nations used to outsource certain functions to companies in developing nations, taking advantage of the lower cost of operating a business in a developing nation.
Value, not just Cost
But outsourcing is rapidly changing. Clients today expect more from service providers. As the world slowly emerges from the Great Recession, the main concern is no longer cost cutting. Clients now expect to get value from outsourcing relationships beyond basic savings.
A typical demand of clients from service providers is to get better understanding of their technology platform. If service providers are unable to provide clients with this information, clients will go and use advanced tools such as Blazent to get it themselves.
“It’s not simply about providing IT at a cheaper price, but also in a more intelligent approach,” says Anthony Watson, CIO at Barclays, in this interesting article.
Visibility into Assets
Another important point that Watson makes in the article is that while in the past clients had a tendency to simply “outsource their mess” instead of dealing with it, today’s highly regulated environment does not allow that anymore. Clients need, and want, to have full visibility into their IT assets and infrastructure. The data needs to be full, complete and accurate. Unless using advanced tools such as Blazent, service providers simply cannot provide this information to their clients.
The 15% Gap
It’s not that service providers do not want to give their clients full visibility into the assets being managed. It’s just that until recently, there weren’t any tools available to enable these insights, resulting in the 15% problem – governance control metrics are generally off by an average of 15% prior to using the Blazent product.
Cloud-Based, Quick Deployment, Immediate ROI
Another problem with traditional outsourcing contracts is that they are often very slow to implement and require an entire team on the client’s end. This was standard in the pre-recession days, but now, clients are looking for ways to set up a lean, fast, easy to manage outsourcing arrangement – and they realize that the only way to achieve that is through advanced technologies, including automation and cloud computing.
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Outsourcing clients today are looking for much more than simple cost cutting. And if they can’t get it from service providers, they are perfectly willing to use advanced, cloud-based technologies such as Blazent and get the information themselves. Next week we will look at several more concerns that are causing the traditional outsourcing model to rapidly change.
