Why Security Is Becoming a Big Piece of the IT Outsourcing Market

Businesses know they need to stick with the things they’re really good at, which may be why security is one of the rising areas of IT outsourcing.

The latest report from market research firm Computer Economics showed that nearly 8 percent of technology budgets in large enterprises are being directed to IT outsourcing firms. While a lot of the work providers are doing involves managing cloud and software-as-a-service (SaaS) products, security was singled out among the competencies where corporations believe working with a third-party vendor will benefit their ability to serve customers.

This may be just good common sense. Obviously, there is more time and talent that can be devoted to supporting products and services when in-house staff aren’t busy trying to identify and fend off the latest cyberattack.

SC Magazine noted that other drivers for IT outsourcing include a desire to be more flexible as an organization, to do new things or to reduce spending in certain areas. Of course, most organizations cannot afford not to invest in security, but the report suggested they are constantly evaluating their options as business and market conditions — which includes security risks — change.

In fact, The Data Center Journal pointed out that 92 percent of companies find the costs of handing over things like disaster recovery are often the same as doing the same work themselves. The objective, however, is to make sure business isn’t disrupted and customers aren’t negatively impacted in the event of a distributed denial-of-service (DDoS) attack, network outage or other security breach. The Computer Economics research suggested that companies are showing more confidence in this area of IT outsourcing because the providers of such services have established a strong track record over the last few years.

Beyond pure IT outsourcing, managed security services are also expected to grow considerably over the next five years. IFSEC Global reported that cloud-based security services in particular would eventually account for a larger share of the overall market than those who provide the same services on a customer’s own premises. Either way, it looks as though the increasing challenge of keeping up with security threats and mitigating the worst risks is leading more organizations to conclude they just can’t do it alone.

Source: securityintelligence-Why Security Is Becoming a Big Piece of the IT Outsourcing Market by Shane Schick

Reinventing outsourcing through agile principles

Organisations are starting to use agile principles to reinvent the outsourcing selection process, with some excellent results

Outsourcing IT is a $300bn industry – and yet studies show that up to 25% of clients are dissatisfied with their suppliers. This is partly because selecting a supplier is a bit like choosing a marriage partner without the benefit of dating.

Consider, for a moment, the traditional contracting process. Clients issue an RFP. Multiple suppliers submit written proposals that, in some cases, exceed 1,000 pages, often cut and pasted from previous proposals, without really knowing the client’s unique business needs. The client inserts detailed service descriptions, performance indicators, penalties and other tools designed to keep the supplier on time and under budget.
At the end of the RFP process, both the contracting company and the supplier are often locked into a multi-year relationship. And if the supplier overpromises and underdelivers, the laborious contracting process begins all over again. Along the way, the valuable time, energy and goodwill of team members has been sapped.

But it doesn’t have to be this way.

A handful of companies have begun using agile principles to reinvent the outsourcing selection process – with excellent results. The Agile Manifesto, originally designed for software development, encourages collaborative, cross-disciplinary teams to move rapidly, prioritise working services over exhaustive documentation, and maintain flexibility to change.

By adopting these principles, companies have an opportunity to extract much-needed value from an otherwise costly and time-consuming endeavour. These agile principles include:

  • Individuals and interactions over processes and tools. IT is not just a commodity – it is a people business. When outsourcing, more than half of the client’s investment goes toward staffing. Rather than issuing an exhaustive RFP, the client issues a short brief (no more than 10-20 pages) that prioritises key objectives and deal-breakers, and articulates what really matters to the business. This serves as a starting point for discussions.
  • Working services over comprehensive statement of work. The client holds in-person, iterative workshops with suppliers – in short cycles – to articulate high-level business needs and jointly explore potential solutions. These meetings are held as much as possible with suppliers’ operational teams, not the sales force.
  • Customer collaboration over contract negotiation. Based on a series of brief workshop discussions (no more than two hours each), the client whittles down the field until they find the best match. This typically takes weeks, rather than months. The workshop discussions cultivate a focus on business-oriented challenges and build co-ownership over solutions, so the roadmap is “ours”, not “theirs”.
  • Responding to change over following a plan. By focusing on business-oriented objectives and how best to achieve them – rather than cookie-cutter solutions – the client and supplier can better adapt to change and take advantage of new opportunities that arise in the business.
    This agile approach to IT sourcing is still quite new, but we have seen clients achieve tangible results.

A European telecommunications company used agile principles to negotiate an ambitious outsourcing deal for application management. Instead of spending precious hours reviewing mammoth proposals and speaking with pre-sales teams (who tend to overpromise), the client held in-depth discussions with the operational teams of the short-listed suppliers.

These discussions included a cross-disciplinary team from finance, HR, IT and other units, and by the end of the process, the entire IT management team – not just the CIO and CFO – had bought into the solution. This early buy-in created alignment, which is a key ingredient for success.

Likewise, an insurance company used agile to transform its IT delivery. Instead of researching various solutions in the market and issuing an RFI, it invited 16 suppliers to an afternoon of “speed dating”. By the end of the day, the client had whittled the candidates down to six.

After two weeks of supplier workshops, the client had enough information to select two finalists. It issued an RFP and this was also conducted in the agile sourcing manner. By holding frequent, in-person workshops with these two suppliers, the time required to close the contract was reduced dramatically (by 30%). The discussions also avoided a wealth of unnecessary documentation and focused the team’s attention on the most relevant issues that affected the business.

While agile sourcing can deliver better, stronger and faster solutions, it is not a silver bullet for all scenarios. In situations where quality of service is relatively similar across the board, as with standard telecom contracts, the agile approach is likely to be overkill.

Similarly, agile sourcing is rarely applicable for procurement within the public sector due to this sector’s unique purchasing constraints, including rules that may forbid face-to-face negotiation. However, in scenarios where the IT solution is unclear, highly customised or complex, then agile can lead to more innovative, fit-for-purpose results.

To succeed with agile sourcing, companies need to prepare in the following ways:

  • Establish multi-disciplinary teams. Agile sourcing requires intense participation from people across multiple units (various parts of the IT organisation, HR, finance, procurement, legal, and so on).
  • Ensure alignment between teams. Given the speed of discussions, it is important to have explicit alignment across teams. We recommend meeting at least twice a week to ensure everyone is pulling in the same direction.
  • Prepare for faster decision-making. To keep the selection process moving, senior management must be prepared to meet often and make decisions quickly. For many of our clients, this can become the biggest bottleneck.
  • Document key agreements. While the agile approach does not require massive amounts of detailed documentation, it is critical to document the agreement in a contract. This can be done between workshops to save time and avoid surprises during the contracting phase.

Outsourcing has the potential to bring significant new capabilities into an organisation and drive innovation, but too often it falls short of these lofty ambitions. Applying agile principles to the outsourcing process can dramatically improve outcomes. It enables clients to focus on what really matters for the business, significantly reduces the amount of time spent negotiating with suppliers, and leads to more flexible, resilient contracts.

Source: computerweekly-Reinventing outsourcing through agile principles by Heiner Himmelreich and François Stragier

Outsourcing IT security continues to grow, study finds

Spending on the outsourcing of IT functions is rising at a rate that is in step with IT operational budgets as a whole, according to a new report, “IT Outsourcing Statistics 2015/16,” from IT research firm Computer Economics.

Enterprises may choose to contract with a service provider in order to preserve capital, reduce costs, improve operational flexibility, increase service levels, reduce management overhead or rapidly deploy new capabilities, the study found.

“Outsourcing enables an organization to augment in-house capabilities without making long-term commitments or large capital investments,” the study said, based on a survey of 132 IT organizations in the U.S. and Canada. The onus falls on IT executives who need to “continually evaluate the potential of outsourcing to help meet their tactical and strategic objectives.”

Perhaps unsurprisingly, it is large organizations – those with IT operating budgets of $20 million or greater – that are leading the trend, spending 7.8 percent of their IT budgets on outsourcing, the study showed. Most of the migration to third-party providers is done for help desk and web/e-commerce operations.

Outsourcing of disaster recovery and desktop support are the IT functions with the greatest potential for successfully reducing costs, and the outsourcing of web/e-commerce operations and IT security are the functions found to have the greatest potential for improving service, the study found.

Another trend the study identified is a rapid growth of SaaS, as evidenced by findings that 65 percent of organizations outsource application hosting. This is the most frequently outsourced function in the study, with organizations reporting that they plan to increase the amount of work they outsource

Source: scmagazine-Outsourcing IT security continues to grow, study finds by Greg Masters

5 Tasks Entrepreneurs Are Better Off Outsourcing

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Being an entrepreneur means there’s always more work to do, and not enough time to do it. That’s why the most successful business owners delegate certain tasks to freelance contractors who specialize in providing valuable time-saving services for a fee.

In today’s Internet-fueled service economy, it’s easier and more convenient than ever to hire people to perform fee-for-service jobs on a one-time or ongoing basis. Here are five jobs you should consider outsourcing to experts, and some resources for finding qualified professionals.

1. Accounting and taxes.
Frankly, no successful business owner should have to do his or her own taxes. It gets more complicated and time-consuming staying on top of your expenses the bigger your business becomes. Hire a reputable person to keep your books in order, help you grow your business, and give you sage advice. A Certified Professional Accountant (CPA) will organize your finances and help you figure out what parts of your business bring in the most and least income. Word-of-mouth is always the best way to find a qualified CPA or you can contact your state accounting society.

Related: How to Build a Better Business with Outsourcing

2. Writing and social media.
When you need website verbiage, high-quality blog posts, newsletter articles, marketing materials (like brochures and ad copy), case studies or whitepaper reports, a professional writer can produce it for you. Many writers can also provide content for your social media profiles to get your message out through Facebook, Twitter, LinkedIn and other sites. This guide to hiring freelance writers explains your main options.

3. Graphic design and web development.
Whether you want a more attractive website, a brand-defining logo or eye-catching print materials, a professional graphic designer will help your business look its best. Whatever your goals, there’s a graphic designer with the talent, aesthetic sensibilities, and visual skills to fulfill your vision and enhance your company brand. Many also offer web development, which will make your website function technically. Check out this basic guide to hiring freelance graphic designers and web developers.

Related: These 25 Successful Startups Were Built With Outsourced Development

4. Administrative assistance.
If you dread sifting through your overflowing email inbox every day, a virtual administrative assistant (VA) may be just what you need to streamline that frustrating process and keep you from being inundated by a constant stream of messages. In addition to consolidating and prioritizing your correspondence, VAs can do other secretarial and clerical tasks such as scheduling appointments and making travel plans. You can find a qualified VA who’ll save you time and help you stay organized at the International Virtual Assistants Association (IVAA) or upwork.com.

5. Web research.
Prospecting for new business and keeping up with the latest developments in your industry can be time consuming and daunting. A web researcher can research information you, whether it’s gathering information and statistics for an upcoming presentation or looking up the names of companies and contacts for a leads list. They can also organize this material in a form that’s easy to use and read. You can find a plethora of web researchers at elance.com.

Before you waste your time on another project, consider hiring freelance contractors to take care of both routine and higher-level business tasks. This will make your to-do list shorter and free you up to focus on the things you’re best at and that generate the most income for your business.

Source: entrepreneur-5 Tasks Entrepreneurs Are Better Off Outsourcing by Jacqueline Whitmore

7 things to do today to improve your outsourcing relationship

How to do the difficult work of harnessing human nature for outsourcing success

In one of my last post, I reflected on the fact that an outsourcing relationship, at its core, is a human relationship. Remembering this is critical to success. But, in addition to being “nice,” there is a lot more companies must do to make the most of their service provider relationships. My contention is that enterprise buyers unlock the most value by understanding the complex human dynamics that happen when two organizations come together to improve service delivery.

Here are seven ideas to help get you started:

1. Pick the right people to manage the service provider relationship. Ask yourself if you would put them in charge of a customer relationship. No? Next!

2. Force yourself to provide positive feedback. The individuals assigned to your account are human, and they want to please you. Study after study shows that nothing works better than positive reinforcement. I know this runs counter to what we believe about hardcore business: why should I praise someone for doing what I am paying them to do anyway? Trust me. It works — in part because service providers aren’t always sure they are doing it right. A little positive feedback not only can bolster the relationship, it can prevent unnecessary over-engineering when they “fix” something that wasn’t broken in the first place.

3. Change your mindset. You are not managing a provider. You are brokering demand and supply of a business service. This perspective will give you a more valuable role to play for your company and will make you happier at work. You are managing an outcome, yes, but you are also managing the bench for your future leadership. You don’t want to convince them they never want to work for you directly.
4. Adapt. Process discipline is healthy until it becomes dogmatic. Your service provider serves hundreds of other clients. Be open to their suggestions. Also be ready to propose improvements that fit your specific needs.

5. Be kind and well-mannered. You’d be surprised at the difference it can make.

6. Be tough. Being kind is not the same as being easy. You can and should be a demanding client — not just because you are paying for a service, but because people on your outsourced team appreciate learning just as much as you do. Progress will come if you can be both demanding and kind. They are not mutually exclusive! Need inspiration? Think of a parent, boss, coach, sibling or teacher who pushed you to do your best.

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7. Watch this video. It will take 10 minutes of your time, and it will change your managerial life. Clients and service providers alike have created such a rigid environment, we should not be surprised that career satisfaction is so low. Dan Pink explains clearly and humorously why everything we’ve been taught about managing teams of professionals is probably wrong, and how we can start motivating them to be great again.

Despite the fact these behaviors have nothing to do with technical or functional know-how, they can make or break an outsourcing relationship. It may be a counter-intuitive approach, but it is a human solution to a fundamentally human problem.

Source: cio-7 things to do today to improve your outsourcing relationship by Esteban Herrera

IT outsourcing remains healthy, but the functions being outsourced are changing

Companies are increasingly farming out functions such as IT security and application hosting, according to a report from analyst firm Computer Economics.

The company interviewed over 130 companies in North America for its report, IT Outsourcing Statistics 2015/16, asking them about their outsourcing practices. Overall, it found that outsourcing is keeping pace with a rising overall IT operating budget.

Median IT budgets rose 3% in the last year, and outsourcing continued to account for a tenth of that money overall. Large companies continue to be the leaders in outsourcing, spending a median average of 7.8% of their IT budgets on it. This compares to 6.7% for mid-range companies and 3.7% for small firms.

Under the covers, though, the functions being outsourced are changing. IT security outsourcing is increasing, as are web/ecommerce systems and application hosting, according to Computer Economics.

Application hosting is the most popular function to outsource, with 62% of organisations doing it, and two thirds expecting to do more so in the future. The rise of SaaS is a big contributor to application hosting, the report suggested.

Not all IT functions are being outsourced at the same rate. Datacenters and database administration are all flat, as is application development.

The percentage of work application development work farmed out by companies is typically low, and often project-based, the report suggested. The median average of a firm’s total application development work that it will farm out is around a fifth.

Customers just aren’t that happy with the service from application outsourcing providers. A third of those who outsource application development found the service worse than doing it in-house, while 42% found it the same.

Cost certainly isn’t a driver either. Fewer than one in five organizations who outsource application development work (17%) save money on it. In fact, 58% of them find it costing more.

The outsourcing of network operations and disaster recovery is also flat. That’s odd, because disaster recovery is one of the IT functions that the report says has the biggest potential for reducing costs through outsourcing. Another is desktop support.

Expect to see outsourcing increasing gradually over time, concluded the firm, as the adoption of cloud computing continues.

One reason for the general health of IT outsourcing could also be that it’s simply too difficult to find the staff. Canadian firms have resorted to temporary workers to fill the IT talent gap.

Some companies have also been found replacing Canadian workers with foreign ones in a bid to cut costs, sparking outrage. In 2013, RBC was found to have bought in IT workers from India via outsourcing company IGATE. The firms had been working together since 2005, it was revealed.

Since then, the Canadian Government has clamped down on workers entering the country under its Temporary Foreign Worker program. Perhaps this could also fuel the growth of outsourcing contracts over the next few years?

Computer Economics looked at 132 north American organizations with at least $50m in annual revenues, or $2m in IT operational spending.

Read more: http://www.itworldcanada.com/article/it-outsourcing-remains-healthy-but-the-functions-being-outsourced-are-changing/376814#ixzz3l25X0eS7
or visit http://www.itworldcanada.com for more Canadian IT News

Source: itworldcanada-IT outsourcing remains healthy, but the functions being outsourced are changing 

Atos claims first in hospital global IT outsourcing

Dutch hospital Zaans Medical Center has outsourced its IT to French ICT services provider Atos, making it the first such facility in the Netherlands to completely outsource its IT infrastructure. Atos is responsible for managing workstations, servers, network, storage, back-up facilities, service desk and service-integration of the hospital located in Zaandam. ZMC is outsourcing many functions ahead of a move into a new hospital from the end of 2016. Atos, which expects more Dutch hospitals to take the same route, has developed a proof of concept in cooperation with Dell to demonstrate its offer.

Source: telecompaper-Atos claims first in hospital global IT outsourcing