A new wave

Di­data is bet­ting approach will take hold in SA en­vi­ron­ment

Finweek English Edition - - Business strategy - BELINDA AN­DER­SON

DI­DATA IS EX­CITED about the mul­ti­sourced approach, says SA strat­egy ex­ec­u­tive Derek Wil­cocks, adding that al­though a num­ber of com­pa­nies are still ner­vous about this approach to out­sourc­ing, the tra­di­tional, blan­ket approach is giv­ing way to new mod­els. This one, Di­data be­lieves, will catch on in a big way over the next few years.

Lo­cally, Di­data has spent more than R50m over the last few years us­ing a team of 15 to de­velop and de­fine spe­cific pro­cesses for de­liv­er­ing on var­i­ous tech­nol­ogy ser­vice ar­eas in the dis­trib­uted com­put­ing en­vi­ron­ment.

So far, it has around 700 pro­ce­dures, but there’s a long way to go, Wil­cocks says, be­fore it has a full set of pro­cesses to plan, build, sup­port, man­age and im­ple­ment ser­vices around the prod­ucts of all the main­stream IT ven­dors in all tech­nol­ogy de­liv­ery ar­eas. Th­ese in­clude phys­i­cal plant, net­work, the cus­tomised com­mu­ni­ca­tions en­vi­ron­ment, data cen­tres and stor­age, se­cu­rity, Mi­crosoft so­lu­tions, the con­tact cen­tre en­vi­ron­ment, and the sys­tems man­age­ment en­vi­ron­ment.

A sim­i­larly sized team is work­ing on defin­ing pro­cesses in Di­data in­ter­na­tion­ally that can be de­ployed to all the ge­o­graphic re­gions of its busi­ness.

Glob­ally, this approach is called the IT In­fra­struc­ture Li­brary (ITIL) and is a widely ac­cepted man­ner of defin­ing and ap­ply­ing best prac­tice to IT ser­vices man­age­ment.

Wil­cocks says the tra­di­tional blan­ket out­sourc­ing model, which took hold in the late Nineties, was for com­pa­nies to out­source a non­strate­gic area of their busi­ness to a sin­gle provider with the aim of re­duc­ing costs. The com­pany out­sourc­ing the busi­ness would gen­er­ally not re­tain any ca­pa­bil­ity in that arena be­yond the man­age­ment skills re­quired to over-

Di­data is bet­ting that the

mul­ti­sourc­ing model of out­sourc­ing will take hold broadly over the next few


see the con­tract.

The re­sult, says Wil­cocks, was that com­pa­nies achieved ef­fi­ciency gains through a fo­cus on pro­cesses, but lost key tech­ni­cal skills. There was also less in­no­va­tion. Also, tech­nol­ogy didn’t un­der­stand busi­ness, and vice versa.

Now, Wil­cocks says, there’s an in­creas­ing recog­ni­tion that IT re­quires peo­ple who ac­tu­ally un­der­stand tech­nol­ogy. There are also very few com­pa­nies that are good at ev­ery­thing. So com­pa­nies need to con­tract out to the rel­e­vant spe­cial­ists. And from a fi­nan­cial risk point of view, it’s dif­fi­cult to exit a blan­ket out­source – this has a huge ef­fect on the busi­ness – whereas if a ser­vice provider in one area of the busi­ness is not de­liv­er­ing, it be­comes easy enough to swap it out with­out as much dis­rup­tion.

In­stead of tak­ing nine months to ne­go­ti­ate a blan­ket out­source project and then be­ing locked in for five years, a mul­ti­source gives com­pa­nies greater flex­i­bil­ity and al­lows them to be more agile. Wil­cocks says the ideal is to have a sin­gle com­pany man­ag­ing the multi-sourced con­tract on a com­pany’s be­half.

He says in the mul­ti­sourced world, a com­pany needs a depth of ex­per­tise in the tech­nol­ogy do­main, and a breadth of IT ca­pa­bil­ity, with ex­per­tise across con­verged tech­nolo­gies in­clud­ing the net­work, voice and the desk­top. It also needs good pro­cesses, ser­vices dis­ci­plines and stan­dard pro­ce­dures in each do­main, that take into ac­count the knock-on ef­fects of im­ple­ment­ing a process in a spe­cific way. Fi­nally, says Wil­cocks, the com­pany must be good at the full ser­vices life­cy­cle. Di­data feels it is well po­si­tioned in all th­ese ar­eas.

Wil­cocks says if its approach proves cor­rect over the next few years, it could be a ben­e­fi­ciary as some of the big out­sourced projects are un­bun­dled and frag­mented, while its com­peti­tors get smaller parts of the whole.

The large Rev­enue ten­der, now in­fa­mous in the in­dus­try for hav­ing been de­layed on nu­mer­ous oc­ca­sions, is one ex­am­ple of a mul­ti­sourced approach in the SA en­vi­ron­ment.

Wil­cocks says that mul­ti­sourc­ing con­tracts are ini­tially tak­ing time to be fi­nalised, and this il­lus­trates it’s still early days. The approach makes log­i­cal sense, but it’s im­por­tant to en­sure the struc­tur­ing of ser­vice level agree­ments is sorted out, he says.

Once a few large, multi-sourced projects are un­der way, there will be a pool of con­sul­tants avail­able with the skills to work on oth­ers, he says.

Glob­ally, or­gan­i­sa­tions adopt­ing a mul­ti­sourc­ing approach in­clude Air­bus and Pfizer.

Com­pa­nies are still ner­vous to out­source. Derek Wil­cocks

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