A while back, business process outsourcing was all the rage. Companies love to outsource everything but their core competencies in order to reduce cost and improve productivities. Hundreds of millions of USD and sometimes billions where contractual values for outsourcing accounting departments,
call centers, application development, etc. While call centers seem to be doing ok, other business divisional outsourcing projects were generally failures and some in a big way.
The general reason for failure was management. It was very hard to produce a successful outsourcing project due to:
Culture – Many of the outsourcing centers were in Asia, Eastern Europe or Central America where cost of labor was significantly lower. However, every culture has their customs which can be quite different from the companies that hired them. Communication is key to manage well. Communicating these differences through verbal and non-verbal means is necessary but couldn’t really be done effectively using remote technologies and just through intermediary managers on both the client and vendor ends. Lack of cultural understanding led to the next issue: expectations.
Expectations – What was delivered definitely didn’t meet expected results. Why? Please reference the first point, culture, for some of my insights. How the requirements were interpreted were not fully understood and aligned. Resources executing on the processes served were not transparent enough to the clients in order to understand how things were done and, if they go wrong, how to fix them. The expected time it took and the amount of effort involved to complete processes and milestones can vary significantly from different cultures.
Vendor Issues – These projects were large and complex. Not only was the budget for these projects enormous but so was the number of human resources needed. A lot of tasks and spending were easily buried in the complexity. After signing contracts, some vendors would then try to meet just the minimum requirement when it comes to dedicating resources and execution of the SOW (statement of work). This not only helped vendor’s bottom line but also freed up resources for the next project. The skills mentioned in the proposal might not exactly be what was offered.
Over time, news of these types of mega outsourcing contracts have gone away. What happened next was that many of these business divisions came back on-shore and even in-house. Once the public internet was able to handle enterprise level data transmission across regions, a new form of outsourcing came to life: cloud computing.
This model works because the core component that is outsourced is not human resource but technical resource. It is a lot easier to manage inanimate objects than animated ones. Communicating with machines is very logical and all cultures can agree on a set of best practice standards on how to do this especially for infrastructure technologies. Just like how all cultures agree to math rules. This in turn has led to better expectation management. Also, cloud vendors are very transparent on the type of services offered, how they provide these services and how much they will cost.
The cloud computing industry has matured well over the last 10 years. The technologies have harden, the way to engage vendors have been standardized and expectations are harmonized across all industries as they relate to cloud computing. Educational institutions should have little to fear when looking to these vendors to extend and improve their services and back-office administration processes.
Before approaching cloud vendors, educational institutions should have at least 1 person with experience dealing with or have worked for IT vendors. This will ensure a faster time-to-market delivery of the right technologies to the right departments at the institutions. For educational vendors, to have a team of front-office staff where each person has experience in education, sales and technology development, can boost your sales performance exponentially. These people can cover multiple areas simultaneously which will lead to less sales overhead and improve after-sales service due to a single message (one view of the truth) can be kept.
And now I chime in… 😊 I have all the necessary skills and knowledge to really help an organization grow either on the educational (client) side as an administrator or vendor side in the front-office. For the former, I have 4 years of teaching experience, business and IT consulting project experience at IBM Global Business Service and I was an IT manager at a large automotive company: General Motors. I can bring in out-of-the-box ideas and transform them to fit school’s customs and processes because I was you. For vendors, I can do technical pre-sales along with business development. I have stories about how I was the only person representing NEC interfacing with partners’ or clients’ technical and business teams during sales meetings. Talk about fun and dynamic conversations.
If you wanna know more… Let’s Talk!
