IT out-tasking is still a popular tool in IT management. As this form of outsourcing is often used, we would like to share our experience with you. In these articles we try to reflect practical experience from a general point of view, less the classical theory of outsourcing or out-tasking.
Our articles are based on the illustrated cycle.
It is important to understand how out-tasking works as well as the goals of the outsourcing organization and the provider. Only if both sides are understood, a lasting partnership can be successful. In the following sections we will briefly present these topics and point out some stumbling blocks. Later, we will go into our experiences in detail.
Out-tasking describes the handing over of certain activities to a provider. Many companies use this, for example, to give the IT operation, i.e. the administration, out of the company. Certain tasks such as the planning and further development of the systems continue to be performed by the company's own employees. As a differentiation: In outsourcing, in addition to overall responsibility, some part of the hardware or even employees are also handed over.
Out-tasking is often used to focus employees on more important tasks. They should, for example, take care of the further development (so-called service improvements) of the services or support the introduction of new technologies. The reduction of operating costs is also a widespread goal.
In IT, however, this usually means that there are separate teams for new developments and the actual operation. This completely contradicts the increasingly used DevOps model (Definition) and agile procedures and must be considered when using these methods.
How a provider works
Companies that provide services to customers are called IT Service Providers. Providers try to provide a cost effective and high quality operation through different mechanisms. Service providers offer their services to several customers and are thus able to perform their tasks more cost-effectively through the use of synergies. As a further savings effect, the services are delivered from countries with lower wage levels.
These so-called delivery centres are often found in Southern or Eastern Europe (nearshoring), Asia or Africa (offshoring). Depending on the location, specific linguistic and cultural aspects have to be taken into account. We do not want to go into in detail here, as it has already been dealt with in a number of articles. Note, however, that some differences in mentality already exist even within Europe and familiarize yourself with them. Thus some situations and experiences can be better understood.
The provider's operating model is often strictly ITIL-compliant. This means above all the separation of tasks according to 1st, 2nd and 3rd level activities.
The theory says that the 1st level area is mainly occupied by less experienced technicians and therefore the costs are comparatively lower compared to others. Therefore, all service providers will try to shift as many tasks as possible to the 1st level. This makes sense for standardized tasks. In the case of complex activities or tasks without fixed guard rails, however, the quality often deteriorates.
Each provider will try to increase the degree of automation with its own resources in order to get by with less than the planned and priced personnel. In theory, this is a great idea, but a change of the provider should be considered here. If a change is carried out, these "machines" often remain in the hands of the provider or the internal employees lack the know-how to support or further develop these solutions.
One of the most important tools for working with providers is the measurability of performance. If you choose usage-based payment models (for example, payment according to a certain number of units), a provider will not provide services that are not measurable. The billing and measurement is based on ITIL processes or tickets such as incidents, changes or service requests. A telephone call or an e-mail therefore no longer brings the desired results among technicians, which brings another problem to light. Flexibility will decrease.
The above-mentioned synergies can be achieved above all with widely used products that are used according to manufacturer specifications. Strong customizing usually increases the deviation from the standard and makes it more difficult to outsource the service. When you think about your products, are they in standard use or strongly adapted? What does the overall networking look like? Would you rather describe your environment as complex or "simple"? Depending on the answer to the questions, you should definitely include appropriate KPIs in the contract, provide for technical experts on a permanent basis, and include the specifics in the handover schedule.
What can be expected and what not?
Define clear goals for out-tasking in advance. Your employees must also be able to understand and comprehend these goals. However, care, not all goals can be achieved with the help of out-tasking or are cost-wise feasible. In our experience, one of the most important principles is not to source services that already cause internal problems due to coordination or complexity.
A clear example are exotic products, which are used only by some companies. Applications for which a service provider first has to develop skills will almost always lead to problems.
Basically, when it comes to outsourcing and out-tasking, it can be said that work must be plannable for providers. Therefore, all planned services should be clearly described in the contract. This also includes expectations and information about the current operating model as well as insight into technical details. RACI matrices, which we will discuss in more detail in further posts, are particularly suitable for documenting this requirement.
Neither out-tasking nor outsourcing can be implemented at short notice. The changes achieved often only become noticeable years later. Therefore, it is extremely important to conscientiously provide the various goals with KPIs and to measure them regularly. Cooperation must be designed for the long term. Goals must be clearly described. It is important that the service provider also understands the needs of the business. This is the only way to ensure optimal alignment.
The topics mentioned above will be discussed in more detail in the next articles, so stay tuned!