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Outsourcing IT in the Nordics during 2010
Outsourcing in the Nordics will increase during 2010. Radar Group International estimates that Swedish IT outsourcing will grow significantly during 2010 in comparison to 2009 due to increasing outsourcing initiatives from the public sector. Similar growth trends have been expected by analysts in other Nordic countries as well.
Outsourcing IT is often tricky and especially now that companies are struggling with the financial crisis, outsourcing providers will also witness higher pressure to lower their prices and improve reporting related to their services. This could be beneficial for the buyers in the short term but will increase the risks on both sides: buyers receiving lower quality in IT services and providers struggling with shrinking profits. To avoid most common mistakes in outsourcing, pragmatic planning is critical.
Common problems with outsourcing that we often witness are:
- Not really knowing if the right amount is being paid to outsourcing providers
- Not being able to improve internal operations because of lack of data from outsourced Service Desks
- Outsourcing not really saving as much money as was expected
- IT outsourcing contracts not covering all that was expected
- Getting mutually beneficial partnership implemented
To address these issues, our customers have acted in the following manner:
- Measuring internal costs, customer satisfaction and SLAs before outsourcing.
- Defining goals for outsourcing.
- Measuring costs, customer satisfaction and SLAs after outsourcing.
- Using 3rd party consultancy for outsourcing if required competence not available in IT
- One person with enough time allocated for the outsourcing project.
- Going through strategic plans to make sure that service providers can support also near-future operations.
- Checking service provider’s reference-cases properly. What do others say about them?
Some customers outsource everything to a single service provider, some use selective outsourcing and some keep everything to themselves. There is no right model to use, everything depends on the way IT is supporting the organization, IT’s internal capabilities, near-future plans, existing partnerships etc. You need to be pragmatic and outsource with care.
P.S. Remember to prepare for handling all kinds of unexpected issues when outsourcing starts.
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