top things to consider when building your outsourcing strategy
TRANSCRIPT
Raúl Zamorano
May, 23rd 2012
Top things to consider in your Outsourcing Strategy
2ÁreaCompany Name
About myself and the company I work for01
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Some numbers about the market
The telco challenge
What should we outsource?
What relationship do we need with our supplier?
Is it possible to innovate when outsourcing?
What are the risks?
Few take aways….
Telefonica DigitalGlobal Cloud Services
3ÁreaCompany Name
Src. Savvy to IT deprmts (2010)
Why don´t you outsource all of your IT?
40%
Data about outsourcing shows a clear trend
ITM Survey (2011)
ITM Survey (2011)
1. Ok I believe you, this is growing…
3. New technologies… & innovation?
Telefonica DigitalGlobal Cloud Services
2. 40% external «not to» reasons
4ÁreaCompany NameTelefonica DigitalGlobal Cloud Services
The operators of today and challenges ahead
Huge customer base
Unending products
and services portfolio
All possible Channels
Customer services
The capabilities
Networks, Systems and Processes
Macroeconomic environment
Competitive landscape
Regulation
The opportunity
The environment
Technology landscape(Cloud, M2M, Apps…)
Huge Data consumptiongrowth
Differentiation New digital businesses
To keep the pace, outsourcing really becomes strategic
Efficiency
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How much should I invest to improve?
Do I understand the causes?
How do I make sure I choose the right partner?
What is the right outsourcing strategy for your process? Dr. Ronan McIvor. Glasgow university
Re la tive c a p a bility
Co m p e titiv e a dva nta g e
or or
or
When should we think about outsorcing a part of our business?
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Could I keep my CA in the future?
How easy to trespass is this without risks?
Is it a trasnferrable activity?
Telefonica DigitalGlobal Cloud Services
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How should our relationship with our supplier be like?
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Sp e c ific to Ve ry s p e c ificSho rt – Me d ium te rm
Le s s Sp e c ificSho rt te rm
Ve ry Sp e c ificLo ng te rm
Broad offer
Mainly cost driven
Often more than one at a time
Several players available
Specific task & processes
Typically one to one relationship
Low dep. upon clear & documented processes
Few players
Strategic/Long term
High dependancy/risk
One partner
Hard to control processes
Telefonica DigitalGlobal Cloud Services
Dependancy very low
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Can I really expect innovation coming from outsourcing?
What does qualify?
Innovation is also a journey in the outsourcing space and results are not immediate…
Innovationjourney
Three phases/steps… simplifying a lot
t• Time• Trust
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Some potential factors for success…
supplier side relationship
Understand the business processes
to add value
Bring knowledge of their industry in
Trust, both personal and competency
based
Innovation governance
Telefonica DigitalGlobal Cloud Services
client side
Tech Knowledge
Open/Umbrella for cross - collaboration
Avoid provider IT management
centralisation
9ÁreaCompany NameTelefonica DigitalGlobal Cloud Services
What about the risks?There is always a risk involved… that can be tackled (almost always)
the risks
VendorSelection
Contracting &Transition
RelationshipManagement
FinanciallyStable?
Fit for Purpose?
Strategically aligned?
Culturally aligned?
SLA irregularities
?
Inadecuate measures to folow
SLA?
Unclarity on charges?
Termination and
continuity plans?
Opportunism?
Transfer of resources?
?
Skills missing?
Lack of inner communication?
Lack of stakeholder´s support?
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Few take aways…
Be sure you exactly know the why´s. Always look at the gap to perform internally first
If you decide to go, document thoroughly and be prepared for things go wrong
Outsourcing is a profession of people. Always keep channels open and build trust
Telefonica DigitalGlobal Cloud Services