A Clear Understanding of Outcome-Based Contracts?

It’s easy to hear a buzz word in the industry and make assumptions. However, what happens when those assumptions prove incorrect? And what happens when those assumptions are the bedrock under which a sourcing contract is being shaped, priced and a customer/service provider relationship is developed?

I’ve heard it many times; “I don’t care how you do it – but we need the job done.” This can be a dangerous mindset if seeking to embark on an outcome-based project. If the customer is stating this, they have missed the point of an outcome-based agreement and should re-think their approach. If a service provider is on the other side of the table hearing that statement, they should challenge the customer’s approach and determine whether the customer has fully comprehended the level of work and commitment associated with the outcome-based approach.

Outcome-based contracting is not a tool by which customers can shift responsibility to their service providers and seek to avoid the effort and time associated with good governance and performance delivery. It is an operational model that requires a strong customer and service provider relationship, trust and a genuine sharing of risk and reward. If a customer misunderstands what outcome-based contracting is (and perhaps confuses it with output-based contracting as this statement suggests), the customer’s expectations are already misaligned with the service provider’s and what each party should be committing to.

Outcome-based models are by no means new to the sourcing world but now with a greater understanding and implementation of Artificial Intelligence (AI) at the customer side, they have grown again in popularity as we see a resurgence in customers demanding greater innovation and more cost-effective service, particularly in process-driven services such as finance and accounting.

But with potential for misunderstanding and customers confusing output for outcome, will we start to see an increase in issues arising from outcome-based contracts?

A true outcome-based model requires a considerable amount of strategic planning from the customer before engaging with service providers. A customer needs to be capable of introspective analysis to understand, develop and communicate its business values and strategic agenda. However, this flow of information will need to go both ways as the parties will need to determine whether they share the same business values and approach on which to base the relationship. While trust will be of utmost importance, this flow of communication should be subject to early contractual commitments of confidentiality. Both parties may want to share, at a high level, their business strategies and potentially confidential information about business projections and future aspirations. This should be done in a controlled and respectful manner, sharing only the information that will benefit the relationship, with the requisite protections in place.

Ultimately both parties need “buy in” from senior stakeholders and will need commitment from every level of the organisation before a strong working relationship can be established. All levels of the customer organisation have to want to work with a service provider as a strategic partner and see the benefit in the service provider helping them achieve their organisational goals. This is more than just the parties outlining and agreeing to certain contract outcomes. A strong and well developed business case should be circulated to ensure that internal alignment. In turn, the service provider has to want to align its business with the customer and trust that the customer will commit to a true risk and reward model.

Each party will need to invest in the process at an early stage. The customer will need to have the right resources available for its internal analysis and baseline of existing services. Both parties will need their project teams to invest time and effort in deal structuring and seeking to exclude external factors that may impact the measurable outcomes that the service provider is remunerated upon. Early investment of this type (on both sides) will be key to demonstrating commitment to the process and a successful, working contract. The time spent in the early stages of development of core principles, agreed measures and conducting due diligence means that there is a significant level of work done before the parties reach contractual negotiation. If customers are not capable or cannot spare the resource to take on these tasks, they would do well to consider using a consultant who understands the complexities of an outcome-based approach and who can assist with baselining the relevant existing services and create a true risk and reward program.

Although not yet at contracting phase, the work effort involved in this early stage of development should be documented and agreed to by the parties. In addition, the baselines from which the outcomes can be measured, the outcomes themselves and any risk factors that may adversely impact the service provider’s efforts should also be agreed on and clearly documented. Outcome measurements will involve negotiation and discussion between the parties. Each measurement should be capable of being objectively monitored rather than an internal metric understood by only one of the parties.

Strong governance is key in most (if not all) sourcing relationships, but it is even more important when working on an outcome-based model. Governance structures should be developed early in the relationship and be robust with the ability to flex over time in line with the relationship needs and both customer’s and service provider’s businesses. It is of paramount importance that the parties – at all levels of the relationship – adhere to the agreed structure. Like with all sourcing models, if one party deviates from the model, the relationship is strained and trust is lost.

The parties will need to trust each other sufficiently to afford a greater level of transparency than is customary with other contractual models. If a party experiences changes in its interests, business strategies or demands, it is important that this information be shared in sufficient detail to allow the parties to address what changes may need to be made, whether that should cause a re-baselining or a change in measurable business outcome. These will be difficult to legislate for at the outset but the contract should afford the parties sufficient flexibility to ensure the ongoing success of the contract for both parties.

Some may feel an outcome-based contract implies a greater level of understanding and more sophisticated level of contracting between customer and service provider. However, more simplistically it involves good planning, a clear demand from the customer for increased innovation and cost savings and a genuine alignment of the service provider’sI lov and customer’s interests. Outcome-based contracting is not suitable for all services but for business processes the model is a joint endeavour that rests on the strength of the relationship and an honest and open sharing of information and risk and reward.

Source: futureofsourcing.com-A Clear Understanding of Outcome-Based Contracts?

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Cashing in on the Future

A financial incentive is a key driver for new business initiatives and investments. Future of Work technologies have a lot of potential to reduce costs, but they also have many additional benefits, called non-cashable benefits. Despite their name, it is possible to drive additional revenues through these to maximize the gross profit.

RPA vs Outsourcing

Today, Robotic Processing Automation (RPA) is one of the most mature Future of Work technologies. It is great for managing rules-based, data-heavy and repetitive tasks and integrates with existing systems – even legacy applications, without the need for a drastic overhaul. A conservative industry estimate is that an RPA robot costs one-third of an offshore employee and one-ninth of an in-house employee. RPA can also process many routine tasks faster and more accurately than most humans, allowing for significant reductions in overhead/FTE costs.

We have found that the typical ROI for RPA is between 300-800% over 5 years, with an average payback point achieved in under 18 months. The savings are not always back-loaded – in some cases of drastic process optimization, we have seen returns within as little as four months.

While BPO has helped many businesses achieve savings in the past decades, there are several underlying flaws with the offshoring model. For instance, it moves work to cheaper locations across the globe, resulting in work that is disconnected from the in-house processes (as discussed in the previous blog). Aside from this potential inefficiency, there is a high rate of attrition (offshoring roles traditionally have high growth and low salary), as the offshore labor market has become saturated over the years. So, while it may have started off as a cheap solution for most businesses, it tends to not remain economical due to increasing operational tensions, competitive labor markets and high inflation rates.

Who is Losing Out?

When there are larger costs for your resourcing solutions, it is the customer and employees who ultimately take the biggest loss. While labor arbitrage through offshoring may generate net savings, customers tend to suffer from lower-quality or less responsive services. This is an inherent trade-off to moving work hundreds of miles away. Additionally, employees tend to encounter issues with miscommunication, which can lower the quality of employment satisfaction. This is where a comparison between existing outsourcing models and RPA comes into the spotlight. Labor arbitrage through RPA tends to generate even larger savings, but without the bulk of the downsides listed above. In fact, RPA is increasingly recognized for the non-cashable opportunities it provides to a business.

Cashing in on the Non-Cashable Benefits

We like to represent the benefits of RPA under Mary Lacity’s “Triple Win” model. Automating processes that consist of routine, manual tasks can benefit not only the company, but also the employees and customers. The following are some examples of the common benefits we’ve seen among our clients:

Company

  • The economics of RPA means that you are guaranteed to get hours back to your business. Time spent doing repetitive tasks can now be shaved off or dedicated to more valuable work.
  • Processes done by robots are always more accurate and faster than those done by humans. This provides a competitive advantage and improved output quantity and quality.

Employee

  • RPA takes the robot out of the human, so employees can look forward to more enjoyable and purposeful work
  • Employees learn new skills such as administrating robot workforces or working alongside assisted automation

Customer

  • Optimized workflows translate to faster turnaround times and improved service quality for customers. We often see improved customer satisfaction levels from RPA
  • Customers also enjoy service consistency and round-the-clock availability

Summary

High cash benefits are possible not only through the large ROI of Future of Work technologies like RPA, but also indirectly through non-cashable benefits. The benefits far outweigh those seen in traditional outsourcing models and provide promising solutions for both the business and the customer. These non-cashable benefits may be more difficult to quantify, but can ultimately make a significant business impact.

Source: blog.symphonyhq.com -Cashing in on the Future

Why the full-time job will never be so precious, as the gig economy crumbles and judgment work is digitized

The new “rules” of the workplace are being defined as computers are frantically being programmed to take the lead in the workplace, when it comes to judgment and intuition. We humans need to be the idea generators, the motivators, the negotiators, and the trouble-shooters to fix computer errors, if we want to govern our emerging digital environments. In short, we need to get closer to our firms, be more tightly integrated and intimate with work performance than ever before… which means the role and tenure of the much-derided middle-manager in the Dilbert Cartoons could be taking on a whole new potential twist – and a whole new (potential) level of relevance.

I would go as far as declaring 2018 as a new beginning of the value of the full-time employee – where alignment with the mission, spirit, culture, energy and context of an organization has never been so important. We are seeing the value of contract work diminish as so much “outsource-able” work is so much easier to automate and global labor drives down the cost of getting things done quickly and easily. Business success is more about investing in the core than ever – and that core includes the people who are the true pieces of human middleware to hold everything together.

The onus is circling back to the value of being a full-time employee, who needs to value the fruits of having a predictable income and adapt to the changing balance of how humans need to work with computers.

Remember when the rise of the gig worker was supposed to revamp how so many of us worked, as we escaped the shackles of the “evil employer”?

Almost two decades ago, the internet was creating the independent worker, as exemplified in Dan Pink’s timeless book “Free Agent Nation: How America’s New Independent Workers are Transforming the Way We Live” became the seminal guide for what is now known as the “gig worker”.

Furthermore, unless recent research from McKinsey of 8000 workers can now be categorized as fake news, 162 million people in Europe and the United States—or 20 to 30 percent of the working-age population—engage in some form of independent work today. And a recent study from freelance site Upwork (which undoubtedly wants to hype the impact of gig world) cranks up the numbers even further, claiming that a staggering 50% of US millennials are already freelancing, before declaring the freelance sector will comprise the majority of the US workforcewithin a decade. Wow.

So are the days of being gainfully employed really disintegrating before our very eyes? Or is the gig hype beginning to atrophy for many people?

The gig economy is becoming a tough place to craft a living if many of the new reports are to be believed. And it’s not just about driving Ubers, delivering food orders and contracting for logistics firms – i.e., working for businesses that exploit the gig economy to drive down labor costs and improve services. It’s the freelance gig economy where people forge a living writing code, supporting content development, delivering consulting work on-demand etc. Even that lovely Upwork research admits: “While finances are a challenge for all, freelancers experience a unique concern — income predictability. The study found that, with the ebbs and flows of freelancing, full-time freelancers dip into savings more often (63 percent at least once per month versus 20 percent of full-time non-freelancers)”. So even if the most biased of sources admits most gig workers can’t cover their living costs, we can conclude that those “Free Agents”, which McKinsey describes as the gig worker sector using gig work as its primary income, are not in a sustainable earning situation.

Today, it’s a buyer’s market for gig work

You only need to spend a little time on LinkedIn to observe just how many people are now marketing their wares as solo free agents, or as part of a company bearing their name. It’s abundantly clear that so many people have decided to set themselves up as independents, that the market for gig talent is saturated and it’s become a “buyers’ market” for gig work. Whether I want to commission a crack consultant to validate some RPA software, hire an analyst to endorse my product, commission a writer to produce a white-label assessment of an emerging market, produce a go-to-market strategy for my business, redesign my website, my logo, or just have someone support my business on a part-time basis… today, I am spoiled for choice. I barely need to hire fulltime employees these days, unless they are truly core to keeping my business ticking along – and I can create real competition to get the work done for much lower costs than a few short years ago.

On top of the risks of commoditizing gig work, we have to contend with the impact of automation and Machine Learning to stay relevant and worthy of earning a paycheck

We’re not in a world rejecting human work, but a world where work is rapidly changing – and the skills of the dynamic middle manager has never been so important. In short, the increasing availability of computing power to crunch massive amounts of data, coupled with advancing tools to tag and label data and workflow clusters with breakthrough programming in languages such as Python for syntax and R for data visualization, are the game-changers that will increasingly impact how we get work done, as we develop continually smarter algorithms to keep teaching computers to do the work of the human brain.

What’s more, the rapid development of Machine Learning (ML) environments such as Google’s TensorFlow, the Microsoft’s Azure Machine Learning Workbench, Amazon’s Sagemaker, Caffe and Alibaba’s Aliyun are becoming the new environments driving armies of coders and developers to align themselves with ML value – desperate to stay relevant (and well paid) against the headwinds of commoditization of legacy coding and app development.

As ML takes over judgment and (eventually) intuition, the human-value onus moves to interaction, agenda-setting, problem defining and idea generation

In short, the disruptive ML techniques are teaching computers to do what comes naturally to humans: to learn by example. Today’s emerging ML tools use massive amounts of data and computing power to simulate neural networks that imitate the human brain’s connectivity, classifying data sets and finding patterns and correlations between them.

Net-net, pattern-matching jobs are increasingly being affected by ML – vocations such as radiologists, pathologists, financial advisors, lawyers, procurement executives, accountants etc. are all being challenged as judgment work is (gradually) being replaced by smart algorithms. However, as elements of these types of jobs are being affected, other job elements become even more important, namely interacting with other humans, creating, setting the agenda, defining and finding the problems to go after. They motivate, they persuade, they negotiate, they coordinate. They are the dynamic conduits of driving information and ideas in an organization and will be increasingly in the driving seat as Machine Learning advancements increasingly take hold. The digital middle manager who can bring a team together and lead people in the right direction does not exist and likely never will…. I’d be amazed if we saw one emerge soon.

Fulltime employment is now becoming a premium situation

Having predictability of income, healthcare costs covered, guaranteed paid vacation time – and a constant supply of work to do – is fast becoming the dream scenario for the disgruntled gig worker. So here’s a thought – go get a JOB. Or if you’re in a job and wanted to try the gig work thing… spare a thought for what your ideal situation looks like, because last time I looked, most firms are doing everything they can to avoid hiring well-paid staff… especially if they can get the work done much cheaper from desperate gig workers.

The Bottom-Line: Five steps to keeping your job:

i) Become the conduit of ideas and information that is irreplaceable right across your organization. So we’ve now come full circle, where the value of having people really close to the business is becoming more important than ever, as computers perform more and more of the routine and judgement based tasks. To the point, the value of the full-time employee goes both ways: companies need people who really understand their institutional processes, their quirks and ways of getting things done… who are onhand to troubleshoot mistakes, but also there to keep the ideas flowing to keep the business ahead of its competition and close to its customers. “Human middleware” is becomimg the real OneOffice glue to break down those siloes and help govern a slick business operation from front to back office.

ii) Develop a positive attitude by finding aspects of your job you do like.Your full time job is likely the best gig-work you will probably ever get, so even if you hate your boss and most of your colleagues, ask yourself if you’d prefer scrapping around for the boring work other companies prefer to outsource. Focus on the interesting stuff you can do and keep reminding yourself that the grass is rarely greener elsewhere. Unless you are a whizz at Python development, the chances are your job-hopping days are numbered and you need to figure out how to stay put and make it better for yourself.

iii) Motivate yourself and become a real motivator. Being motivated – and helping to motivate others – is probably the least computerizable trait of all. If you aren’t motivated, you are placing yourself at risk when your leadership assess which of their team then want to take them forward into the future. If you really can’t get yourself excited about what you do, or your company just demotivates you in such a way you can’t dig yourself out of your rut, then you may need to take that Python course and brush up your resume…

iv) Let the computers take the lead and become the controller to fix mistakes double checking, intervening when the computers do something dumb. Humans and computers make different kinds of mistakes, so we really need to bring humans and computers together intelligently to cancel out each other’s mistakes. Fighting automation and ML is a lost cause, especially when your firm is completely bought in to the concept and it rolling out bots and working on developing smart algorithms. Just let these things take the lead and them figure out how to make them functional and monitor their errors, ad computers will always keep making them. You can’t fight innovation, but you can nurture it, manage it and troubleshoot it.

v) Find your pareto balance and stop whining. Nothing in life including your current or prospective employer will be perfect. Focus on the 80% that is right, versus making yourself (and others around you) miserable by the other 20%. There is rarely a perfect fit where workers only get to focus 100% on all the things they love to do… there has to be this 80/20 compromise, or you will be forever hopping around trying to find a workplace nirvana that doesn’t exist. And it today’s social world your reputation follows you around like never before… and employers are steering clear of the whiners at all costs.

Source: horsesforsources.com-Why the full-time job will never be so precious, as the gig economy crumbles and judgment work is digitized

Where Will Outsourcing Head To in 2018?

This time last year I wrote in these pages about the year ahead for outsourcing. The key trend I focused on was an increase in partnership with clients and suppliers getting much closer—and that seems to have taken place throughout 2017. One major driver for this has been the change in how consumers become aware of a product and then convert into customers…what marketing professionals call the ‘customer journey.’ Think for a moment about the classic customer journey. A potential customer would see some advertising or some type of marketing campaign, search for additional information, compare products, eventually make a purchase and possibly follow up with a call or email to the customer service team if they have a problem.

Now this experience is much more complex—the way that customers learn about products and access information has completely changed. A consumer might learn about your products by seeing information on a social network, reading a review site, viewing an online recommendation by a previous customer, receiving an email or any number of other ways. This has also dramatically changed the way that customers purchase products too, with many brands offering online or in-app purchase options.

This dramatic change in consumer behavior has affected outsourcing relationships because it has quickly changed many aspects of business, including how:

  • Brands need to promote their products
  • Brands need to offer an omni-channel experience, so customers can locate information and make purchases in many different ways on different channels
  • All these dramatic supply chain changes affect CRM systems, ERP, stock control and how internal corporate departments like customer service and marketing can function

The rapidly changing nature of how companies are structured has led to a need for deep expertise. Brands that are trying to blend their marketing and customer service function have found that it’s a much easier proposition to do this with a partner that has very deep knowledge of how an omni-channel sales, marketing and service environment can work. This leads to a much closer sense of partnership between the client brand and the suppliers delivering IT, customer service or marketing services. These suppliers have started behaving much more like partners because that’s truly what they are in this modern environment.

I think this trend will continue. We are still in the early days of truly exploiting an omni-channel business environment and most companies are still figuring out the implications for their IT systems, public messaging and customer service processes.

When I think forward to 2018, my natural first step is to see what the suppliers and bloggers are saying, but to be frank, I was a little disappointed in my most recent scan of the 2018 outsourcing trend articles. I identified three trends that are predicted frequently:

  • A renewed skills shortage driving more outsourcing
  • Suppliers focusing more on specific expertise rather than offering an all-around service
  • The price vs. quality debate strongly supporting quality as more important than price

I believe these trends could have been published in any end of year prediction list for the past decade so it’s a surprise to see many business journals just focusing on the same old topics. I believe that in addition to the continuation of the partnership trend I predicted last year, there will be a couple of strong trends—especially in Europe.

1. GDPR: The EU General Data Protection Regulation (GDPR) will be enforced beginning May 25, 2018. This completely changes how companies across Europe can store and work with data. It is the biggest shake-up in how companies can use data since the 1990s and essentially puts power in the hands of the customer. If you cannot tell your customer in clear and simple terms why you want to capture and use their data then you are no longer allowed to capture it – and fines in the millions will hit those who ignore the new rules. Many companies that are scared of the legislation will turn to their partners for assurance that their systems are compliant.

2. Data Analysis and Security: Yet even with the GDPR rules and compliance, there will be a renewed focus on capturing more data on customers, analysing it in much more detail, and creating personal experiences or generating business decisions from this information. This leads to a need for increased security, which, from the perspective of data capture, is covered by a new GDPR-compliant approach. But it more generally needs an entirely new approach to security because this information will sit at the heart of your future business. Once again, this is such a dramatic change in practice and procedures that many will focus on working with trusted partners to get this right.

To some extent, these trends are self-reinforcing. There is a great desire for companies to understand their customers better, which requires more data, more insight and better data analysis. However, this also requires GDPR compliance, and by working with expert suppliers in a close partnership all these business benefits can be safely delivered.

I believe that 2018 will be an exciting year for those in the outsourcing community. Partnerships will be deeper and the expertise that the supplier community has in data analysis, and the management and security of data will be sought out more than ever before.

Source: outsourcemag.com-Where Will Outsourcing Head To in 2018?

Outsourcing DevOps? Here’s What to Look For – DevOps.com

DevOps synthesizes methods, processes and tools with the goal of improving your company’s velocity at which you deploy applications, which serves your customers better. Teams using DevOps best practices and tools to create production software are much faster than organizations using traditional infrastructure management and software development methods. In 2016, RightScale’s “State of the Cloud Report” estimated that 70 percent of SMBs were adopting DevOps methods. Every indication is that percentage has increased.

For companies that already understand the value of software development outsourcing, partnering with a capable outsourcing vendor for DevOps is a natural next step. For companies who want to embrace the benefits of DevOps but haven’t yet, aligning with a qualified DevOps outsourcing company is really worth considering.

Consideration No. 1: Pick the Right Project

If DevOps is new to your company, or the DevOps partner is new to your company—or both—it’s very important to pick the right project to begin work together. Also, it’s possible that the project you target will influence the selection of your DevOps outsourcing partner.

Here are some questions you may want to use in selecting the right project:

This question…. is important because… Which software, if successful, will show the clearest benefit (i.e.: ROI) to the company? Software with clear business benefit will generally get better buy-in from the user community, and higher quality participation. Which software has the clearest goals and scope of work? It’s always easier to achieve the goal, when the goal is clear. Do any projects require the use of new, unproven technology? Unfamiliar technology can be a dangerous variable in your work and risk estimates. How many other systems will the newly completed software need to integrate with? Integration testing is time-consuming and requires a high levels of coordination. Which projects are expected to have the longest duration? Unforeseen variables naturally occur in long running projects — personnel changes, other business distractions, loss of momentum, etc. Which projects are expected to require the largest number of participants? More people involved equals more complexity. What employees (IT and business stakeholders) will be part of the projects? DevOps requires good collaboration and speed. IT and business area participants must be able to fulfill their roles accordingly.

Consideration No. 2: Vendor Communication

In selecting the right outsourcing DevOps partner, the ability to communicate well is one of the most important considerations. A partner who communicates poorly can derail a relationship that has all the right methods and tools in place for success. design iterations and project sprints simply cannot happen if your outsourcing partner lacks the proper communication skills. Conversely, an outsourcing vendor who is truly acting like a partner in the relationship, communicating well and often, can help you overcome any number of unforeseen issues along the way.

Evaluate how well prospective vendors respond to your due diligence questions. Their responses could tell you a lot about how they’ll interact with you during the project. Are they clear? Do they interact in professional ways, or does it seem a bit random and disorganized? Are they prompt and timely in their interactions, or are there “black holes of silence”?

If you see evidence of poor communication during the due diligence process, you’ll almost certainly have problems when you’re actually engaged in working together. As you check references, try to determine if other customers experienced problems in communication and interaction—those can pose as red flags when it comes to selecting your vendor.

Consideration No. 3: Vendor Location

Global software development outsourcing is a proven success for many companies. However, you must be attuned to the vendor’s geographic location compared to yours. Would time zone differences be an issue? This may affect the geographic location from which you’ll select your outsourced DevOps team. In a recent survey, one-third of U.S. companies that outsourced to India considered the 10-hour (or more) time difference to be a big challenge. DevOps activities cannot be artificially hampered because of time zone issues. The best DevOps outsourcing companies have a business model that allows U.S. time zone companies to interact easily with the vendor’s “A team” supporting your project. Be wary of companies that assume that all Skype and conference calls will be done off-hours to your normal business day—or plan to have secondary members of their team available during your normal work hours.

Consideration No. 4: Vendor Technical Skills

As you examine a prospective outsourcing DevOps partners technical capabilities, consider these questions:

  • Do they have the relevant skills and tools experience I need?
  • Is this a core competency of the company, or the expertise of a small select few inside the company?
  • How does this company go about attracting new talent with these same skills?
  • What certifications do they hold?

Automation of good process makes it possible to eliminate bottlenecks in the software development cycle, so you can truly “sprint through your Sprints.” Automation tools must be used with consistency by you and your outsourcing DevOps partner. Perform an inventory of the available tools:

  • Will you be able to seamlessly (and automatically) promote code?
  • Can you perform test-driven design?
  • Can you perform test-driven development?
  • Can you easily associate features and fixes with promoted code?
  • How will you perform regression testing?

DevOps teams will have programming language expertise that includes Python, Ruby, PHP and Java. Remember: DevOps means infrastructure as well as applications, so a true DevOps outsourcing company will have employees with expertise in infrastructure-oriented software and tools such as Windows PowerShell, Docker, Puppet, Ansible and SaltStack. You may also want to look for expertise and certifications for networks, databases, and operating systems.

DevOps outsourcing companies should be experienced with the continuous integration (CI) method—the CI tools which support the associated processes. CI tools help merge source code updates from all developers on a specific software build, notifying the team of any failures in the process. Popular CI Tools include CruiseControl, Jenkins, Travis CI, TeamCity and GitLab.

The best partners employ a programming staff that have achieved certifications that are important for your DevOps project needs. In addition to certifications around the tools and language mentioned earlier (such as Puppet Certification, for example), you will want to look for certifications in:

Consideration No. 5: Vendor Commitment to Training

As you evaluate a prospective DevOps outsourcing company, ask yourself: Is continuous training a part of their business model? A good partner invests in their programming staff’s training on a continual basis. We like to see evidence that their programming staff regularly renews their certifications—and the outsourcing company should be actively advocating this.

Consideration No. 6: Vendor Experience and Size

To succeed with DevOps outsourcing, you need a partner who has relevant experience and is a size that complements your company size.

Experience. The ideal DevOps outsourcing team will have experience in your business vertical (example: discrete manufacturing, banking, etc.). It also should have expertise in the system functional area of your target project (e.g. finance, e-business order processing, warehouse management, etc.). Of course, the demonstrable experiences should include work using Agile and DevOps techniques.

Size. The right partner should be neither too large nor too small. The outsourcing company needs a pool of programmers large enough to keep with the intended work pace of your project. Conversely, we caution IT managers to be wary of extremely large outsourcing companies. Your project and company must be “big enough to matter” to the partner you select. If you are seen as too small in terms of the revenue opportunity, the outsourcing company will defer attention and their top talent to larger customers who are more able to influence decision-making.

Source: DevOps.com-Outsourcing DevOps? Here’s What to Look For

Outsourcing: Do You Need to Hire Help, But Aren’t Sure How

Outsourcing can seem daunting. Research reveals that 80% of the companies state cost-cutting as their primary reason for outsourcing. It cites better customer experience, customer retention and scaling as other pressing reasons to outsource. No matter the reason, if you’ve never done it before, you might be at a loss for where to start.

1. Shadow yourself

If you don’t know where to begin when it comes to outsourcing, record what you do during a typical work week. Act as if you were explaining your job to someone brand new. Look at your calendar and think about what you do every day. Once your week begins, write down tasks as you do them, so you remember every step. You might even want to time how long it takes you too. It will help you realize what you do on a regular basis as if you were giving the tasks to an assistant. You’ll also become more aware of what’s on your plate in the first place. Decide what to outsource and what you believe you should be doing.

2. Make a wish list for outsourcing

Once you identify every little thing that you do, decide what to outsource. Use what you jotted down as a wish list. Sift through what you wrote and ask yourself:

  1. Does this task prevent me from making more money? If yes, it may qualify.
  2. Is this a task that I dislike doing? If yes, it’s something to consider.
  3. Does it just make mathematical sense to outsource? If yes, it’s another item to think about handing off.
  4. Can I afford to outsource this right now? The cost will be a significant factor when deciding.

While there might be other factors that come into play, use these questions to help jumpstart the decision-making process.

3. Get quotes

Use social media to ask around. A Facebook group can be a great resource for getting referrals. Whether you need website development, a graphic designer or someone to handle payments, invoicing or bookkeeping in general, Once you state what you are looking for and get recommendations, ask for quotes. You will have to schedule calls and take time out of your schedule to learn more about their services or review proposals that list deliverables and pricing. It also may take a little time to train them in the beginning.

4. Try it out

After taking quotes and choosing what best suits your needs and budget, hire someone and see how it goes. Just be sure to map out an agreement. If you want to try this out, be sure the contract states the duration of time you’d like to work together. Whether you’re hiring a podcast guest booker to promote your book or a financial writer to create content for your blog, you want to be clear about how you will work together. This way, you can see how it goes and later decide if you will continue. I think it’s easier to start small and then hand over more responsibility down the road if the working relationship is a fit.

The Bottom Line

Time and time again you might hear that you should outsource. Though it might seem overwhelming at first, follow the steps above to get started. If it helps you lower costs, scale your business or improves any other part of your business, then it’s well worth it.

Source: Medium-Outsourcing: Do You Need to Hire Help, But Aren’t Sure How

How to institute an agile IT outsourcing process

Traditionally, IT organizations have spent six months to a year or more on the IT outsourcing transaction process, finding the right providers and negotiating a suitable contract. But as IT services — and, increasingly, as-a-service— deals have gotten shorter, that lengthy process may no longer make sense.

Industry advisors and consultants have debated the potential benefits of speedier sourcing for several years. In today’s rapidly changing business and technology landscape, it may become an imperative. But an effective outsourcing engagement demands more than just an accelerated version of the traditional IT services transaction process.

“Typical attempts to speed up the process include leaving out important activities or rushing to a solution to meet completion dates or budget objectives. In some cases activities that are skipped can be picked up and completed during transition,” says Michele M. Miller, director of KPMG’s Shared Services and Outsourcing Advisory. “However, we find that in most cases these activities are never completed and result in lost value and dissatisfaction in the outcome of the outsourcing project.”

Preparing for an agile approach to outsourcing

CIOs must take four steps to make sure they prepare their organizations for a new, agile approach to outsourcing, Miller says. First, they must define their business strategy, including the future state of IT and business services, in order to accurately asses how outsourcing will impact their companies down the road. Second, they need a clear understanding of their base case — the current cost of doing business today and down the road. Third, they need to define their target operating model (aligned with business strategy) in order to calculate the potential benefits of internal optimization vs. outsourcing or resourcing.

Finally, they must assemble a dedicated and experience outsourcing transaction team that was involved in building the strategy and is empowered to work closely with providers on day-to-day planning, design, and documentation of the solution as well as oversight of desired business outcomes. This preparation takes time an effort. However, “these steps are required for a successful outsourcing engagement,” says Miller, “and most companies are willing to put in the effort.” In fact, part of the reason Miller’s group began to document this agile approach to outsourcing was the fact that some companies had already established these key components.

 

With that foundation in place, IT leaders can attempt a more agile approach to outsourcing. Like its namesake software development approach, an agile outsourcing transaction process involves constant communication and collaboration between the IT organization and its providers throughout the outsourcing lifecycle, adapting as needs change. Unlike the traditional sourcing approach in which IT service customers approach the process in a linear fashion — gathering requirements, creating an RFP, engaging providers, and drawing up a contract — agile outsourcing transactions are more fluid.

Agile outsourcing starts with a series of sprints. “The sprints focus on collaborative ‘solutioning’ vs. the traditional approach, where the client outlines a solution up-front, often excluding other potentially beneficial alternatives from serious consideration,” Miller says. “Via these sprints, the parties consider alternatives together and jointly build a solid, viable solution. This results in a more-accurate RFP response, less time required in the due diligence phase, and more precise pricing during final pricing submissions or best and final offer.”

Because the process is collaborative, with both parties knowledge of requirements and solutions early in the process, timelines can shrink significantly. In fact, business requirements and solutions are so well understood that a traditional 26-week timeline can be condensed to as little as 12 weeks, Miller says. But increased speed is just one of many benefits. Agile outsourcing can sharpen the focus on business outcomes and instill greater collaboration not just between client and provider, but also among a company’s ecosystem of suppliers, in delivering those outcomes, according to KPMG.

Most companies are drawn to the agile outsourcing concept, but not all can make it work. “These projects are not shorter because we leave out critical processes; the client needs to have completed the four key requirements mentioned and be willing to work in the fast-paced iterative environment and make decisions quickly throughout the project,” Miller says. “Similar to many components of outsourcing there isn’t a single approach which works in all situations.”

IT service providers are game for the new approach, according to Miller. “They understand that a collaborative approach to sourcing tends to result in a more successful outcome for both parties because each shares in the responsibility for the design of the solution.” However, it does require that they, too, have done the upfront work of designing and documenting their solutions for ease of integration into the process.

Source: cio.com-How to institute an agile IT outsourcing process