IT departments have a vital role to play in helping network operators adjust to a rapidly changing world. A successful IT department supports the business effectively by providing a good customer experience and by helping the business bring new services to market rapidly. This can be a real differentiator for network operators that get it right.
Outsourcing is one way IT departments can support the aims of the business. However, while PA’s regular surveys of organisations highlight many IT outsourcing success stories, they also show that there is room for improvement. Many organisations are failing to get the value and the innovation they want from IT outsourcing.
How can IT departments deliver more from outsourcing? Governance is key. To maximise the benefits of outsourcing, the governance of sourcing arrangements must be clearly aligned with the things that matter to the business.
PA’s surveys show that for many organisations outsourcing does not always deliver on every front.
IT innovation is important to network operators, but only a third of respondents to our survey feel that their IT outsourcing relationships deliver technological innovation. Over a quarter report no benefit from innovation at all
Almost 30% of organisations report a need to restructure their agreements to realise better value from outsourcing. Most move towards multi-sourcing, with almost three-quarters wanting to break up a standard single contract into separate agreements
The desire to introduce multiple contracts underlines the importance of getting the governance arrangements right. However organisations believe their governance models lack maturity, with only 16% of those surveyed believing they have a robust model for outsourced services.
Clear governance from the start can help network operators maximise the benefits of IT transformation. Responsibility for transformation cannot simply be passed to the outsourcer. Instead network operators and their service providers need to share a clear understanding of what is required, and expectations of how those requirements will be met.
With clear governance for outsourcing contracts in place, IT departments are able to increase their focus on strategic activities that add value. These include:
building relationships with stakeholders – to better understand the business needs and engage the business in the transformation
defining the target operating model – to develop the target IT architecture with the service provider
selecting the optimal transformation approach – steering the course between evolution and revolution, and developing a clear roadmap for the transformation
ensuring the promised benefits are realised – not only in terms of the IT savings but, just as importantly, in terms of the cost savings and benefits for the business as a whole.
With scope to focus on value-adding activities, IT departments can deliver the customer experience and reductions in time to market and cost that network operators need if they are to prosper in an increasingly competitive market.
To speak to one of our experts about how to optimise your IT outsourcing arrangements, please contact us now.