The Power of a Service Provider

In today's fast paced business environment everyone is seeking to save operational costs, drive new business and enter new markets. Often the answer to these challenges is to purchase and implement new technology. For many this approach works well. However, when competition is fierce and cost savings are vital to drive the business forward, a critical question arises: Is buying technology really your best option?

As an outsourcing services provider, our mantra is that we enable our clients to better focus on their core business while letting us take care of their non-strategic but business critical processes. As of late it is becoming more common for companies to compare our services to a pure technology purchase. This is mainly driven around the upward trend of automation projects and digital transformation initiatives.

There is an important point to understand with respect to digital transformation: it is about much more than just deploying a new technology or tool. It is about the broader concept that digitally maturing companies behave differently than their less mature peers. According to an MITSloan report, the difference has less to do with technology and more to do with business fundamentals.(1) To help ensure success, in addition to technology you have to address fundamentals that include the people, process and information pillars of digital transformation holistically.

This is why, as exciting as new technology might be, it most likely isn't the silver bullet to all of your business challenges. Let me suggest another way to think about this idea. When collaborating with our clients I like to use the analogy of electricity. If you had the need today for a standard service such as electricity, how would you acquire it?

Would you go out and spend money upfront to buy a generator, then purchase the ongoing maintenance that it would need or even perform that maintenance yourself? What about filling it with gas and making sure it started every morning? What if it breaks down? Who do you call to fix it? How fast can they get it up and running again? At some point in the near future there is going to be a better generator - should I put time and effort into investing in it? What else will it give me? Is it worth it?

OR…

Would you sign up to an electricity provider and simply pay for what you use on a monthly basis? Therefore there is no need to worry about upfront costs and who is going to service it, never mind upgrades.

As you can see there are certainly many advantages to engaging a service provider. You don't need to worry about running your technology, who from IT is going to learn these new skills and ensure you are maximizing your new investment. Not to mention, what do you do about disaster recovery and wasted fees due to under-utilization or, even worse, not having enough horsepower when things get busy and demanding?

While many companies get excited about their internal automation projects, does it really matter to the business how you get to the final output? If the final output meets your Service Level Agreements (SLAs) ,the business case makes sense and the price is fair, then why get bogged down in internal technology projects. They are time consuming and resource intensive especially for your non-strategic business processes which senior leadership find hard to comprehend.

Taking on a new technology projects can be risky. Analyst and advisory groups such as the Standish Group (2) and Wellingtone (3) outlined that over 50% of technology projects and implementations have some level of failure due to such factors as an inexperienced team, poor management, lack of product knowledge, insufficient resources. With this in mind, partnering with a service provider who has prior experience and proven track record, should be given serious consideration.

Finally, many of us at some time in our careers have experienced a technology implementations failure. The MITSloan report points out that addressing the business fundamentals (people, process and technology) are the real keys to successful digital transformation. Engaging the right outsourcing services provider is a proven way to ensure that you maximize not only the appropriate technology, but the talented resources and streamlined processes that can position your organization for continued growth in the days ahead.

 *All views and comments are my own.

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1. Gerald C. Kane, Doug Palmer, Anh Nguyen Phillips, David Kiron and Natasha Buckley (2015) STRATEGY, NOT TECHNOLOGY, DRIVES DIGITAL TRANSFORMATION: Becoming a Digitally Mature Enterprise. MITSloan Management Review, July 14, 2015
2. Standish Group, Chaos Report 2019 : https://www.opendoorerp.com/the-standish-group-report-83-9-of-it-projects-partially-or-completely-fail/
3. Wellingtone, State of Project Management 2019: https://wellingtone.co.uk/state-of-pm-annual-industry-health-check/