By Gerrit-Jan Albers, Service Delivery Manager at RDB Consulting
Outsourcing is becoming an increasingly popular model, particularly in the IT field, as the specialised technical skills required in this industry are in high demand, but in short supply. Organisations often cannot afford to hire full time resources to administer each and every aspect of the IT environment, nor are these skilled personnel always available for hire, and often the jobs they are required to perform are not full time tasks to begin with.
As a result, companies turn to outsourced service providers, who have the necessary skills available on demand to assist companies with managing complex IT environments. However, when it comes to the outsourcing contract, the hours they are paying for are often erratic and the organisation either exceeds or does not fully utilise the number of hours supported on a monthly basis by the contract.
In the real world, IT work load depends greatly upon the status of a particular project. During the implementation phases more hours are often necessary to ensure that operations are up and running correctly, and configuration ‘tweaks’ are required to achieve optimal efficiency. During later more mature phases of a project, however, the number of hours required drops dramatically, as the IT environment usually only requires routine maintenance and administration.
If an organisation signs a contract at the outset stating that a certain number of hours will be required to begin with, they are often forced to pay for these hours on a monthly basis further down the line, when these resources are no longer needed. In effect, they over pay for a service the company no longer requires on such a frequent basis. If the number of hours is underestimated and the organisation exceeds the agreed amount, the company is liable to pay extra for the hours over and above the contract, and further down the line may again be obligated to pay for extra hours that are no longer required.
Organisations are often stuck in inflexible contracts, paying for resources that they may not be fully utilising, and the onus of fixing this scenario does not lie with the client. Outsourcing providers should be flexible enough to offer IT services on tap, in other words on demand according to agreed upon specifications.
The outsourcing contract should be fine tuned at the outset to meet more appropriate deliverables, as it is in fact relatively easy for the outsourcing provider to reallocate resources to another project if they are not being utilised, or to allocate extra resources to projects that require more hours. Hours can also be carried over if they are not required in a specific month, for use at a later date when extra resources may be required.
When looking to partner with an outsourcing provider, organisations should look for this type of flexibility in order to avoid being locked into an inefficient and costly contract. One way is to ensure that the service provider offers a service based on a total number of hours, that the client can then use as needed during the specified contract period. The outsource provider should also assist with planning to ascertain how many hours will be needed for the duration of the project, including implementation and support, to ensure maximum use of billed hours and optimal performance of the IT implementation.
A ‘cast in stone’ contract can end up being a costly exercise for organisations, as enterprises need flexibility, particularly during times of economic uncertainty and tightening budgets. Having a contract that delivers IT on tap allows businesses to use the hours as and when they are needed, ensuring optimal support at all times. Often a certain amount of ‘carry over’ at the end of the agreed contract is permitted, ensuring that even if hours were not used during that period they are not all lost.
Outsourced IT on tap delivers several tangible benefits to the business, including the ability to harness the skills and expertise of a specialist IT provider, and the opportunity for skills transfer between the outsourcer and the employees at the company. When problems arise, organisations using this type of service can be sure that they will have access to highly skilled and experienced resources, and will be able to make use of less costly, more junior resources on a day to day basis, creating a more cost efficient environment. Flexible hours also ensure that help is available to the organisation where and when these are needed.
IT is not static, and as a result outsourcing contracts that are inflexible and remain inflexible for their duration simply do not make sense. The IT environment is constantly changing, and organisations need to be able to take advantage of outsourced services when and where they need them. In short, they need IT on tap.