A new wave
Didata is betting approach will take hold in SA environment
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