Outsourcing Your Network – Lock, Stock, and Barrel or Bite

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Outsourcing Your Network –
Lock, Stock, and Barrel or Bite-sized Chunks?
The days of massive outsourcing
deals, in which large multinational
organisations handed over their
entire ICT function to a single
services partner, are over. All too
often, these arrangements led to
failure in the past. On the journey
towards infrastructure-as-a-service,
businesses are now going about this
more strategically, outsourcing parts
of their environment in manageable
portions, or preferring specific,
individual managed services. So says
Dave D’Aprano, Group Executive – IT
Outsourcing at Dimension Data.
‘Today’s trends indicate a journey towards
a multi-sourcing or selective sourcing
model, and for good reason. If you
outsource your ICT infrastructure and
related services in bite-sized chunks, you’re
able to leverage specialist providers to
drive innovation and retain more control
over your strategy. Plus, you can evolve
your environment to suit your business
better, and at your own pace.’
latest thinking | Outsourcing Your Network – Lock, Stock, and Barrel or Bite-sized Chunks?
Doing more with less
The IT division is under tremendous pressure
to offer the business new and innovative
services, just as much as the business itself
is under pressure to offer customers new
services in order to remain competitive.
‘This demand for innovation has a
direct impact on the corporate network,
because more and more technologies
now run over IP – from telephones
to CCTV,’
D’Aprano explains.
‘So, the network needs to constantly
evolve to keep up, growing in both
capacity and complexity. This, in turn,
requires constant growth in skills
and expertise from the organisation’s
employees in order to support and
manage that evolution.’
At the same time, economic circumstances
and tough competition cause top
management to demand greater costefficiencies from all departments,
including IT.
‘So, CIOs are using a range of sourcing
strategies to drive the optimal mix of
cost reduction, risk management, and
innovation,’
says D’Aprano.
‘The challenge is to continue to
optimise your organisation to do more
with less. The question that CIOs are
asking is: What is the right blend of
in-house expertise, managed services
and IT outsourcing? The real driver is
finding a model that suits the business
strategy, manages your risk, saves costs,
and ensures maximum efficiency in
delivering new services to the business...
whatever form that model might take.
‘The next challenge is to ensure that the
model you choose can flex and adapt
over time as your business strategy
evolves. The rate at which IT is required
to change is increasing; it’s no longer
a “set-and-forget” business function.
Businesses are looking to exploit
technology to provide competitive
advantage, and models like cloud
that change the way we consume
technology are fuelling this change.
Ultimately it makes business sense to
move all services to a pay-as-you-go
model. Next-generation ICT managed
services providers are offering such
consumption models to meet client
requirements. If your IT sourcing
strategy doesn’t consider how to blend
such models, it may become an inhibitor
to your business.’
latest thinking | Outsourcing Your Network – Lock, Stock, and Barrel or Bite-sized Chunks?
Understanding costs
‘Before you can find and adopt a new IT
consumption model,’
says D’Aprano,
‘you need to understand the cost that
you’re already incurring to run and
support your network. Do you really
know where you’re spending your
money, and are you getting maximum
value for that money? What are the
risks involved? Does your support
infrastructure underpin your strategy?
‘A good example is one of our wellknown manufacturing clients. A
serious concern for the business was
risk: if something went wrong with
the network, its production would go
offline. Upon examination, we found
that the underlying architectural design
and service levels offered on equipment
maintenance weren’t built to ensure the
highly available network that’s required
for a manufacturing business. Not only
did the network have a number of single
points of failure, but it also didn’t have
SLAs to ensure that the service provider
restored the technology to working
order when these critical points failed.
The business was therefore bearing
all of that risk. Strategically, it would
never risk operating without restore
SLAs on, for example, a piece of plant
equipment which is obviously critical.
But without realising it, the business had
done exactly that by not regarding the
network and the plant equipment as a
single ecosystem and therefore equally
critical. The organisation needed to start
aligning its architecture; operational
and support models; maintenance
agreements; and costs. It also needed
to align its operational, support, and
maintenance strategy with its overall
business strategy.’
CS / DDMS-1458 / 02/14 © Copyright Dimension Data 2014
Adding the most value
‘It boils down to understanding where
your internal IT division adds the most
value. More often than not, your own
people’s greatest worth lies in their indepth understanding of your business, as
well as their ability to develop new and
innovative ways to deliver IT solutions
to the business that would improve
processes, drive efficiencies, boost
productivity, and serve customers better.
There’s not much worth in IT spending
most of its time doing mundane
operational, support, and maintenance
tasks simply to keep systems up and
running. Which of those day-to-day
activities do you really need to continue
doing internally because they help you
drive competitive advantage, versus
outsourcing them to an external provider
who in many cases can drive greater
efficiencies due to scale?’
Says D’Aprano:
‘Whether those functions are then
consumed in the form of a managed
service, or as a full outsource, depends
on the level of control you want. Do
you simply want someone to deliver
an outcome for you, or do you believe
that you need to control some part of
that process for strategic reasons? The
answer to these questions will differ
from business to business and from
industry to industry, and will change
over time.’
Gaining greater flexibility
D’Aprano believes the biggest requirement
from organisations today is flexibility.
‘They want their partners to deliver
outcomes, but they also want
contractual manoeuvring room in
order to adjust the nature of the
relationship when required. Many tend
to move between models – ranging
from simple break-fix support to full
outsourcing – depending on the cycles
of their business and what they deem
to be important as the next step in
their journey. So it’s important to
partner with an organisation that can
offer you that flexibility, and that’s
interested in working at the right pace
of transformation for your business,
however many steps it may take to
get there.
‘Be careful that your sourcing model
doesn’t lock you out of business
opportunities,’
advises D’Aprano.
‘Don’t sign a contract with a partner
that binds you to doing something in
a specific way. This makes it hard to
introduce innovation into the business in
the form of new functions and processes,
when you need them. Outsourcing in
bite-sized chunks allows you to build
a far more agile business, because you
can tailor the services you buy more
specifically to your business objectives.’
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