The Outsourcing Dilemma - The Search for Competitiveness.pdf

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how can an organization become and stay competitive 15 other new concepts, such as Customer Relationship Management (CRM), are more likely to succeed. I believe that on a worldwide basis, the majority of large IT projects have always failed to reach their full potential by a significant margin and that this situation is very likely to continue. Surely, the real problem stems from the fact that the ultimate aim is often difficult to set out. This is mainly due to not knowing what the competitive requirement is likely to be at various stages in the future and the ineptitude and short-term nature of management thinking. However, the ever increasing implementation periods and shortage of suitable skills also plays a major part. Building a bridge over a major river will seem to most people like a very daunting task but in many ways it is considerably more straightforward than a typical large scale IT project. In bridge building you know where the opposite shore is and you know that you will have to build in a straight line towards it. In IT projects the opposite shoreline is often only a faint image and often keeps moving. Then instead of engineers the skill shortage often means you have to make do with the equivalent of bricklayers. In the circumstances it is not surprising that the IT version of bridge building often produces sections going in the wrong direction. Questions Have you got pleasant memories of implementing the last major system Do you welcome the thought of doing it all again Do you know the cost, including consultancy, preparing invitations to tender (ITTs), installation and implementation of the last project Was the cost justified by improved performance Do you think changing the systems will enable the functions affected to become competitive Do you think a new system will justify the cost in performance and competitive terms How long do you think the new system will enable you to remain competitive Using management consultants Organizations are using management consultants at a greater rate than ever before. For the larger established consultancies, at least, the late 1990s represented a period of almost
16 way that consultants carry out their work. Prior to the late 1970s most consultants carried out what is often now referred to as theoretical consulting. Depending to a large extent on the function under investigation, the consultant would concentrate on understanding what was required of the service and then produce a report outlining new and hopefully better ways of doing the work. With theoretical consulting the emphasis was on the report and the client was left alone to carry out the practical effort necessary to bring about the change. The consultant was therefore rarely in a position where blame or criticism was likely to stick. These days most consultancy assignments are of a practical nature. The consultant is engaged to provide specialist advice and then work with the client’s staff to make the necessary changes. The gradual movement in emphasis from theoretical to practical consultancy was triggered by technology developments. Practical consultancy would have been possible without these developments but, in the event, technology provided the spur. The extent of the change towards practical consulting can be judged from the fact that many of the large consultancies derived from an auditing base now describe themselves in terms that emphasize the practical systems development nature of their services. Consultants are bound to be better advisers if they have past experience of implementing change and, in practical consulting, they are forced to accept responsibility for their ideas. This means there can be few clients who would prefer to employ consultants on a theoretical basis. Nevertheless, there was one advantage in theoretical consultancy that to a large degree has been lost. A consultant asked to study a business or a function of a business prior to the mid 1970s, did so without the pressure of ready-made software solutions piling up daily in front of the team members. Often the theoretical consultant was the only person ever to have both the time and inclination to look for an ideal solution since the organization was founded. Frequently, the consultant had no idea what the solution was until the ‘main findings’ were finally submitted to paper after which the answer often became beautifully obvious. The key point here is that the old style consultant could not trust the client’s staff to give an accurate analysis of what was required from any given process and was therefore forced to get the answer from ‘the customer’. Now many assignments start with client and consultant studying the range of ready-made package solutions and conthe outsourcing dilemma organizations are using management consultants at a greater rate than ever before continuous boom. Admittedly, work that was directly related to Y2K problems tended to fall away in the latter half of 1999, but all the indications are that the consultancy train has started to pick up speed again. The vast majority of consultancy assignments have always concentrated on trying to improve a client’s performance in a function or group of functions. However, there has been a fundamental change over the years in the
Page 2 and 3: theoutsourcing dilemma
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Page 6: about the author My own involvement
Page 10 and 11: introduction Both the title of this
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variations on the outsourcing theme
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chapter 6 points to be aware of whe
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the process of choosing a service p
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chapter 8 potential drivers of outs
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what does this all mean 115 The com
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what does this all mean 117 life. S
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what does this all mean 121 ● For
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chapter 11 an alternative way of ap
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appendix b before contemplating the
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162 the outsourcing dilemma Outsour
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Sometimes the transition begins wit
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the essential elements of the contr
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appendix d the rights of transferre
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index Abbey National Treasury Servi
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index 203 employees see staff enter
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index 205 outsourcing aims, identif
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index 207 Social Security, Departme
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