BY GERARD ESPARDUCER, DAVID MATONS AND ALFONS MARTINEZ
Not only the big players, but also small or medium businesses can benefit from outsourcing parts of their processes, structures and lifecycles to external partners. In Spain, digital transformation is becoming an engine for IT consulting, representing 7. 9 % of the entire revenue of Spain.
Companies are struggling with their digital transformation agendas, mainly dealing with challenges like the growing complexity of the IT environment, limited resources and the adoption of new technologies. The majority of small or medium-sized companies does not take involvement of Managed Services providers into consideration due to the anticipated costs or the specific business area they are operating in. (FIG. 7)
A criterion that may turn a decision in favour of a medium-sized vendor is the skillset and the experience of the staff. Small or medium-sized vendors usually assign all the seniors within the team to the project so that they ensure the success of the customer project. Also in order to provide consistency, if the vendor is providing Managed Services continuously for the same customer, they usually allocate a team consisting of the same people for that, which big suppliers normally cannot guarantee. It is crucial to have senior, skilled people in the team, allowing high employee satisfaction, which means retaining better talent, low fluctuation and keeping the know-how for a longer period of time. If a supplier is used to agile, proactive handling, they can emphasise early problem prevention and ongoing improvements. Customers can benefit from employed sophisticated technologies like virtualisation, augmented reality, IoT and more. An agile mindset of the staff in a small or medium-sized vendor ensures a faster and more flexible delivery. They also leave an option for the customer to retain his current equipment and process model, wherever it is reasonable. On the other hand, a partner can advise the customer where adapting to the models and processes of the vendor makes sense.
“Having the most senior and skilled staff assigned to a Managed Services project is crucial for a fast, flexible and consistent realisation.”
Medium-sized vendors often play the role of auditors not only for the health of internal IT structures but also for the health of other big suppliers. Those are often accommodated within big projects and frame contracts. Small and medium-sized vendors establish benchmarks so that the delivery happens in the same way and at the same quality. An agile transformation does not depend on big framework contracts, but by the same token, it can be said that a lot of dependencies are linked to big projects. One critical point in terms of CIOs deciding between large and medium-sized or small vendors is that if a CIO chooses a big renowned vendor, his risk and responsibility in case of a project failure is a lot smaller than when choosing a smaller, lesser-known vendor. How can a medium- sized vendor apply for projects with a big customer? The answer is, by bringing the highest possible level of certification, the maximum level of contacts, engagement and knowledge of the customer to the table.
There are a lot of new technologies available, but rather than concentrating only on the technologies, it is important to focus on the processes you are transforming. The number of potential solutions can be so high that it may overwhelm your pipeline. Therefore, it is essential to concentrate on the final status you want to achieve. As an example, the Internet of Things can be mentioned – it is not being driven by technology; it is driven by operations. Through IoT, you can decrease the energy consumption of your devices by, e.g., 30%. This principle is something that also applies to the transformation through Managed Services; transformation is not about selecting buzzwords, it is about selecting processes you want to make more efficient and profitable. (FIG. 10)
Example: RAISING EFFICIENCY BY TRANSFERRING MAINTENANCE SERVICES
An international pharma company wants to raise the efficiency, reduce costs and therefore shift additional services to an external partner. They ask ERNI as the existing strategic consultant who transformed already six services for them to transit also the seventh maintenance management service. The customer based their decision on the previous experience with the service transition and has the confidence that the chosen partner is the right consultant to implement this project in order to reduce possible risks. The same expert team is assigned for the transition as it was for the previous six transitions, which is not common with a big supplier. This guarantees consistency for the customer. The partner carries out an analysis of each team’s performance and identifies possible improvements in processes, methodologies and tools. A challenging aspect is also to tackle the change in the staff mentality in order to become responsible for the delivery of results. The partner defines customer needs on a monthly and annual basis. Together with the customer they define the measurement unit for the transferred service. A pricing model based on the delivery is being established charging only for the results really delivered. Service Level Agreements are set, like e. g. packages on time, quality, and in relation to which penalties for the case of not keeping the targets are defined. The partner reports about the delivery on a monthly basis. Within the transfer of the latest seventh maintenance service to Managed Services the partner raises the efficiency of the customer by 15 – 25 %. The final feedback is very positive, especially also on the aspect of strengthening the partnership on a long-term basis.