Automation, outsourcing and shared services:

1
Automation, outsourcing and shared
services Alternatives or complements? Waleed
Hanafi November 5, 2001
2
Outsourcing Motivators

• Outsourcing is the answer what is the question?
• Fear
• Capability
• Capacity
• Cost
• Complexity

3
IT Governance

• Traditionally IT run as a cost centre
• Annual un-equal fight over budgets
• Business managers unable to challenge IT
  professionals
• Alignment becomes issue
• IT staff do not feel part of the business
• Effort to keep plant running may not be reflected
  in business performance

4
Models for Governance

• First Principles
• Money stays with the business
• The consumption of IT services and products must
  be in control of business
• Demand is managed through pricing
• Transparency and clarity required to ensure IT
  costs are understood and controlled
• Core infrastructure is Corporate, and funding
  should be outside the day to day competition for
  resources
• Network,Email, voice, security

5
Mature Organization required to use Outsourcing

• Have to be able to manage internal resources
  before you can manage external
• Requires disciplined structure
• Understand what services are required
• Understand what form (quality, quantity,
  performance) services take
• Service Definitions
• Service Catalogue
• Service Level Agreements
• Contract for Service

6
Escaping from Projects

• IT people buy stuff
• IT people run projects
• When projects fail, or stuff doesnt work, IT
  people run bigger projects
• We dont need another hero
• Drama queens and adrenalin junkies
• By changing mind-set to services, we accept that
  there is an on-going requirement
• Boring and successful

7
Dealing with Shared Services

• No real mystery
• Already buy electricity, dial tone, water,
  garbage collection
• Either we know what we want, or the industry has
  to be very clear about what it delivers
  standards
• IT Vendors have refused (so far) to accept normal
  commercial practices (quality, warranty,
  responsibility, pricing)
• Shared Service vendor adds a layer between IT
  vendors and you

8
The Great Dilemma

• The person buying the service must be able to
  understand the service being delivered
• We all understand what a phone is, but what is a
  data network?
• Is there competitive advantage in maintaining
  technical expertise?
• How do you stay current when the outsourcer is
  doing all the work?
• How do you attract and retain top people when
  they dont get to play?