Are you getting ready to negotiate an outsourcing contract? If so, place flexibility high on the list of negotiation goals. Many customers involved in long-term outsourcing contracts in the past have learned the hard way that the restrictive and static nature of normal contract terms can tie their hands in the rapidly changing outsourced IT environment.
Tall oaks from little acorns grow. That old Latin saying applies to the staggering growth taking place in international Information Technology (IT) outsourcing. The growth trends predicted over the next few years in the US and around the world are rooted in a strong and established corporate practice of outsourcing. As this growth continues, COMPASS sees a worldwide need for more effective, corporate outsourcing strategies.
The European Theater is primed and ready for growth in Information Technology (IT) outsourcing. Total European IT outsourcing is estimated at around $15 billion in 1997, and with firms fueled by the need to concentrate on their core competencies, that figure is expected to rise to around $27 billion in 2001.
International Outsourcing: Diversity is the hallmark of the UMW group. The thriving industrial enterprise, based in Malaysia, stretches from Singapore to the Philippines to Canada, with spots in between, and engages in core businesses ranging from automotive and heavy equipment to material and environmental management. Several years ago, the company saw the need to connect all the dots on their corporate map with an Information Technology (IT) system that enabled them to gather and manage knowledge more effectively.
Companies frequently turn to outsourcers to harness the tremendous power of spiraling IT technology and shape it into a tool for standardizing their information functions across business lines and geographic borders. Unfortunately, all too often they then tie the outsourcers’ hands by failing to establish standardization as a top priority within their enterprise.
International Outsourcing: Executives at Grupo Nacional Provincial (GNP) know all about the value of research. Statistics and other research information are part of their day-to-day business as the largest insurance company in Mexico. Therefore, when the company was considering outsourcing part of their Information Technology (IT) functions, the first step logically was research.
All things are not equal. Never has that truth been more evident than in the challenges facing multinational corporations’ efforts to implement seamless network communication around the globe. The goal of providing and maintaining full capabilities to even the most remote production facility frequently slams into the reality of infrastructure inconsistencies across the company’s global footprint. At that point, many companies turn to outsourcers.
Specialization, once primarily the domain of physicians and attorneys, is spilling over into other fields in the ’90s. CPAs specialize. Writers specialize–even some dog groomers specialize in certain breeds. IT is no exception.
If it’s not broken, don’t fix it. Hyatt Hotel Corporation put a new spin on that old adage in 1996 by ‘fixing’ the company’s well-functioning IT organization before it broke. The result is an outsourcing agreement that continues to deliver Hyatt’s high standards of customer service while providing the resources to plan for the future.
Culture shock. That’s not something most would expect conservative icon Rolls Royce to embrace, but that’s exactly what the company sought in its outsourcing relationship with EDS.
Outsourcers that have the infrastructure and more importantly the expertise within a given process will be able to capitalize on that opportunity.
We continue to see the refinement of the evolving nature of the deals at the industry’s high end, which reveal a high degree of creativity and innovation in some cases driven in large part by IT executives.
If you look back five years ago, most people would think of the value of outsourcing simply in economic terms as a way of reducing costs and restructuring the balance sheet. I think the focus now is far more on is there a better way to leverage technology in a very competitive environment where we have pressure to move quickly.
Outsourcing in the traditional sense a way for companies to save money is changing. The clients I talk with now view outsourcing, or some form of it, as a viable option to not only saving money, but to actually help them improve their competitiveness.
It’s no secret, but there’s a major shift to outsourcing functions or business processes. What is interesting is how different buyers and sellers of these functions or business processes are going to market.
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