The "O" Word: Outsourcing May Be More Valuable Than You Thinksitecore:item:Tree_Node_C4F37224C9844DFC97FEDB131E78EB30


by Skip Goodwillie
May 26, 2015

If you gave a word association test to anyone in IT, it might go something like this: insourced help desk = good, secure, right; outsourced help desk = bad, job loss, wrong. Let’s face it: If you have a job and you give it to someone else, that’s a bad thing. If you run a help desk of any size and you transfer that work to someone else, that puts the previous team at risk of job loss, right? That’s been the traditional view of outsourcing, but there’s a different perspective to consider: Outsourcing is a solution, not the solution. It’s not good, it’s not bad—it’s just different.

The reason organizations outsource is pretty simple: it can work. It’s growing in popularity, and there’s no real end in sight. Over the last twelve years, the total number of US jobs moved offshore, and the total wages associated with those jobs, has increased sharply, with most of that growth in the past five years. Contributing factors include a down economy, a weaker US dollar, and the globalization of US companies. Bottom line: Outsourcing isn’t going away.

Even if your company’s culture is never to outsource anything or anyone, every help desk manager is one new manager, one new C-level executive, one economic turn, or one merger away from having to consider it or defend why you’re not considering it. Now, I’m not saying that outsourcing is a universal remote. It doesn’t work in every circumstance. But make no mistake: it does work exceptionally well in more cases than you might think. Companies do it all the time, and have been doing well for a long time. What do you think the cloud is anyway?It’s a place where things can be outsourced.

Outsourcing works exceptionally well in more cases than you might think. Companies do it all the time, and have been doing well for a long time.
Tweet: Outsourcing works exceptionally well. Companies do it all the time & have been doing well for a long time. @ThinkHDI http://ubm.io/1Kj0SZo

Why do companies outsource? In the strictest sense, a company outsources to enable it to best meet the business requirements of the company. Some of the key business factors that are considered include:

  • Reducing costs
  • Adding a 24×7×365 coverage model to support a global footprint
  • Cultural requirements (e.g., the new CEO is service-oriented)
  • Mergers and acquisitions (e.g., you inherit an outsourced contract)

While the list above are some of the public reasons, experience has uncovered these and other, more personal reasons:

  • Your boss told you to
  • The existing team is long in the tooth
  • New systems (e.g., ERP) are beyond the current team’s capabilities
  • The company needs to scale fast
  • Executive management doesn’t want to be in the help desk business (e.g., too much trouble, too distracting, too labor-intensive)
  • The help desk is considered nonstrategic
  • Support isn’t a crown jewel for the company
  • Outsourcing the help desk is the most nonintrusive way to prove that outsourcing can work without sacrificing key parts of the business
  • Bankruptcy

What do you outsource? Simply put, you should outsource the right stuff. Everyone assumes moving the whole operation to a third party is the end game—all or nothing—and is easy to see how people arrive at that conclusion. If your executives are talking about it, hearing it from their colleagues, and reading about it in the in-flight magazines, figure out exactly what they want to outsource and then run a proof of concept on part of a larger process or service. Map out specific tasks, services, or operations that make up each outsourcing target. The data and business requirements may demonstrate that only specific processes or services need to be outsourced (e.g., a specific application, specific tiers of service).

When thinking about what should be outsourced, many managers get hung up on how many jobs will be lost: How many of my current team meambers, including myself, will lose their jobs? That’s natural. The single biggest reason companies resist outsourcing is fear, uncertainty, and doubt from the existing team. To overcome those impulses, ask the vendor if they’ll rebadge any of the existing team. Rebadging employees will give you a way to right-size the team, retain tribal knowledge, educate the new team on best practices, and even provide avenues for career growth that you didn’t have before (i.e., opportunities with the outsourcers other clients). The biggest benefit to being rebadged, however, is that you become something more valuable to your new employer: a profit center. This is a subtle but powerful difference in terms of how you’re thought of, treated, and valued. (Personally, I’ve been both, and being a profit center rocks.)

Once you’ve figured out why you’re looking to outsource and what you’re going to outsource—the hardest parts—you’ll need to figure out how to do it. Two things are essential: a vendor you trust and can work with, and top-to-bottom buy-in and support from both organizations. The relationship will, of course, be defined by a contract (e.g., terms, service levels, penalties), but the success or failure of the engagement will be determined by relationship each party has with the other. Anyone can do any job when it’s easy; the true character of the company and its people will emerge when the job is difficult. A close relationship between both sides will get you through the difficult times. With the right relationships, I’ve seen penalties waived, overage charges waived, structural changes made without changes in price, etc. It really is a partnership, so make sure each side treats it as such.

The list of potential outsourcers is long, so how to you choose your partner? First, you’ll need to answer some specific questions:

  • Should I go onshore, offshore, near-shore, or in-house?
  • Should I go with a generalist or specialist?
  • Should I go to the cloud or stay on-premises?

Then you’ll need to decide how close your vendor and their operations should be to your company? While you may get a lower cost per ticket if you off-shore the help desk, for some companies it comes at too high a price (e.g., customer experience, reputation, security risks). Remember, Target was hacked through its HVAC vendor, so your vendor needs to be vetted from the security side, too, not just the operations side.

According to Forrester Research, outsourcing customers are no longer interested solely in scale or price. They’re seeking agility, flexibility, vertical alignment, responsiveness, and trust. And they may be more likely to find that in a smaller, more focused provider. Niche vendors may deliver more focus on customer satisfaction, a specific specialization, greater flexiblility, and better talent. They may also be more likely to take risks and develop novel solutions, tailored to the needs of the customer.

When you’ve figured out the why, the what, the who, and the how, it’s time to figure out when. The answer to this question is fairly obvious: whenever it makes sense (or cents). The key here is to map the disruption to normal business operations. If you’re a CPA firm, for example, you won’t start an outsourcing agreement between January and April. For IT organizations, you don’t want to do it right when you’re converting to a new ERP or the next generation of the company’s mission-critical application rollout. Once you figure out the right time period, you then have to communicate with end users and set the right expectations. Never execute an outsourced arrangement until the client’s end users know what’s coming. Great vendors will help draft a communications strategy for the client’s needs.

There are many horror stories of outsourcing gone bad, but there are just as many stories of engagements that have met expectations and delivered a win-win for all parties.

As we’ve discussed, outsourcing can be a very effective solution. Yes, there are many horror stories of outsourcing gone bad, but there are just as many stories of engagements that have met expectations and delivered a win-win for all parties. Answering the who, what, when, why, where, and how is necessary for ensuring the best possible outcome for all involved. If done properly, you just might find that outsourcing is the right course of action for your company after all.


Skip Goodwillie has more than twenty years of progressive sales and operational experience in the IT industry. He’s currently the director of managed solutions for a systems integrator, where he is responsible for the sale of managed services that include IT outsourcing, help desk, desktop, and monitoring and managing. Skip received his JD from the University of Richmond and his BA in English and Spanish from VMI.


Tag(s): business of support, future of support, insourcing, outsourcing, rightsourcing, service desk, service providers, sourcing, support models, supportworld

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