5 commandments of good outsourcing on the example of ERP systems

The fashion for outsourcing emerged along with the development of the market in specialised services. Because of the high specialisation of individual entities and the need for budget optimisations, businesses tend to transfer niche competencies outside their structures. The tendency to make use of external experts' competencies is visible, among others, on the market of IT services. What should we bear in mind when deciding to outsource a given area?

The possibility of simplifying and arranging individual areas of the company’s activity using advanced IT solutions makes it easier to do business and eliminates both paperwork and potential errors. Data collected by companies may become not only a resource needed for reporting purposes, but also a source of new business opportunities based on analytic tools connected with Business Intelligence or Big Data.

Commandment I: Outsource what you can

These days, external service providers co-operate closely with customers, offering frequently tailor-made solutions in place of ready out-of-the-box products. Such methodology assumes primarily a thorough understanding of the company’s needs, development plans, philosophy and, most importantly, all business processes occurring inside it.

Partner co-operation based on the above principles brings more advantages than a simple subcontractor-customer relationship does. It leads to a better selection of products and flexible co-operation, so the final outcome is much more satisfactory for the customer.

A tremendous role in this process is played by internal IT departments, which act as a substantive link between the service outsourcer and the home organisation. They have the necessary knowledge of the company’s processes and situation and, at the same time, do not have to focus on work requiring unique competencies thanks to outsourcing.

Commandment II: Cold calculation: it pays off

It would be difficult to indicate clear prerequisites upon which an outsourcing decision is conditional. An insightful calculation of costs related to the given area of operation of the IT infrastructure will allow the company to consider the best options. For example, the company does not have to incur high costs of construction of its own server room on which the central enterprise management system will be maintained. The company may choose one outsourcing model by leasing the entire necessary space, or part of it, in an external server room where the supplier guarantees certain parameters and conditions of maintenance of the continuity of operation of servers.

It is also worth considering issues relating to the outsourcing of specialists with unique competencies. For example, engaging an in-house team responsible for the maintenance of the SAP system in the company is often unprofitable, to say the least. This involves the need to employ many professionals responsible for particular areas, including financial, logistic and other consultants. These costs are disproportionately higher as compared to costs of outsourcing the same service.

Commandment III: Maintenance: Take care of updates and use know-how

The term ‘maintenance‘ is quite broad and may include inspection, prevention and also improvement activities. This concept can be applied to IT systems, too. Although they do not exist physically, they also require appropriate maintenance work that ensure the continuity of their operation. With regard to popular ERP systems, maintenance services are based on updating the system on a current basis and on providing access to a series of training courses, workshops and the knowledge base of practical experts creating these solutions.

Commandment III: Remote administration: specialists… without limits

The aforementioned possibility of remote care of ERP systems is particularly significant in today’s world, which is often called the “global village”. IT technologies make it possible to erase formal borders between states and continents and, therefore, allow companies around the world to work and co-operate with one another on a running basis.

Convenient ticket-based error reporting systems guarantee that each outgoing service request will be allocated to the proper specialist. Every user of the system has also a constant preview of the current ticket status and can contact a consultant irrespective of his location.

Commandment V: Help the IT environment develop with your company

Apart from maintenance and updates, an inseparable element of the life cycle of the IT system is its development. New entities in the company’s structure, production lines and areas of activity mean also new business areas that must be covered with relevant functionalities of the system. In the case of ERP systems, development work is performed by application service teams that respond to users’ demand on a current basis.

This area can also be outsourced to external companies; in addition, it is often a natural continuation of the co-operation established in connection with the implementation of IT solutions. With an excellent understanding of the configuration of the IT environment, business processes and specific characteristics of the company’s activity, it is possible to perform a particularly adequate analysis of needs and maintain good partner co-operation.

One of the more current definitions of outsourcing is the transfer of a part of niche competencies outside the company. A well-planned outsourcing process results not only in a more orderly arrangement of the internal structure of the enterprise, but also in cost savings and the possibility of focusing on key aspects of the company’s activity rather than investments in secondary areas of activity.

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