Big Bang and evolution. Which outsourcing strategy brings more benefits?

A debate on the beginning of the outsourcing project may resemble a discussion on the beginning of the universe. The theory of evolution and Big Bang are two competitive concepts also in IT outsourcing context. If you get familiar with them, you will be able to choose a suitable path for your company. The text will not be impenetrable. Quite the contrary, basing on the international experience, Comarch can help you plan a road to the stars, that is straight to the point avoiding any obstacles. 

The risk comes from unawareness of one’s actions

When implementing an outsourcing solution or changing a current service provider, one of the most risky moment is when a new partner takes over the responsibility for supporting part or the entire IT. Up to this moment it is necessary to prepare well so that the beginning of this change has little impact on business processes, and in the case of the model – there are no conspicuous changes. A famous investor – Warren Buffet – once stated that the risk came from lack of knowledge on actions we took. The best idea is to learn through knowledge and examples from other people’s lives. Comarch has a long-standing experience in all processes of implementation and maintenance of outsourcing projects. We have carried out projects related to takeover and commencement of rendering outsourcing services both from multinational organizations with branches in a few dozen locations and in larger or smaller companies with one head office. Our experience shows that the very awareness of such risk is crucial. The bigger the awareness, the larger the organization. It is very simple – the larger number of organizational units, the larger number of dependencies between them. In addition, along with the development, their growth occurs accordingly. Therefore any change in one of the team translates into the work of several other. In the case of larger projects, there are more systems, more tools, more people and this makes us more exposed to mistakes and losses during changes. As far as outsourcing services are concerned, there is no field such change does not apply to and – consequently – the influence of such change on the company is considerable. What can we do to minimize the threat to our organization? How can we prepare to implement a new IT model smoothly? Briefly speaking, we may raise a question – what is more beneficial – evolution or Big Bang?

Evolution

One of two major paths we may choose during transition, i.e. preparation for outsourcing, is a gradual assignment of responsibility to a new partner. Importantly, there are two ways of understanding the term “gradual”:

1. as gradual assignment of responsibility for IT fields (networks, systems, telecommunications, CallDesk support, etc.) to the partner in accordance with the schedule
2. as gradualtransition to further locations of a company, in accordance with the schedule.

Evolution is then all about gradual assignment of IT support in terms of technical or geographical range of the project (location may be also understood as a specific department). What are the advantages of this choice? There are certainly at least a few but let’s distinguish the following:    

1. allocation of the smaller number of employees at the beginning of the project,
2. possibility of gradual extension of competence units,
3. reduced impact on company’s operations,
4. possibility of using one’s experience (which persons of English descent like to call “lessons learned”) and correcting the processes during transitional phase.

What are the flaws of such approach? All of them entail a long process and thus suspension of key decisions. In particular, it may lead to the following consequences:

1. longer process means a bigger risk spread over time,
2. unclear responsibility for support between all current process actors,
3. bumpy road to satisfactory internal IT support.

Big Bang

An alternative to the evolution is the approach that puts behind the past and future and according to which a new outsourcer takes over the responsibility for all elements of the service in all locations. Let’s try to take into account typical advantages and vices of such approach, and then compare them with evolution theory.  

Advantages:

1. fully shaped teams on the day of project kick-off,
2. one major risk instead of many small ones,
3. clear division of responsibilities into all fields of support.

Vices:

1. basically no chance to eliminate all potential hazards, in particular no „lessons learned”,
2. in the case of problems in any field, a possibly big impact on business processes and general company operation.
3. necessity of allocating larger number of persons to the project in the transitional period,
4. necessity of assuring full support teams on the day of project kick-off

Summary

Certainly a large number of readers who read the aforesaid words thought like: nothing but evolution. Another group reads the preceding statement in disbelief. “How come as in my opinion the only reasonable solution is the Big Bang” – a question comes to their mind.  

Which way to choose when we decide to change a provider or outsource services to other entities? What is a correct answer? Sadly the answer is always the same: it depends. It depends on time we have, on business susceptibility to cooperate on implementation, on the scale of the project, on availability of key persons related to the customer and provider; let alone the fact that the Big Bang and evolution do not have to exclude each other but there are intermediate variants.     

The main issue we always have to take into consideration when choosing a service provider is its experience in providing outsourcing services but also, or perhaps above all, experience in taking over projects from other providers. Primarily, we may use its knowledge and experience and therefore minimize the risk related to outsourcing services to a new partner. This partner will lead us throughout the process of changes and will supervise the project at the operation stage. It will show fields which require a special attention, advise on how to build mutual project management tools, how to control KPI and how to co-use application base or knowledge.

Grzegorz Gawron, Service Manager in Comarch ICT