| One of the great challenges facing senior executives | | | | corporate strategy) This requires three key elements |
| today is whether or not to outsource the delivery of | | | | to be present in your outsourcing framework: |
| some of their services. The financial services sector | | | | * A Strong Internal Service Management Team |
| was an early adopter of outsourcing in the US and UK | | | | responsible for the day to day management of the |
| and many institutions have outsourced their IT | | | | Service Provider. (commonly referred to as the |
| functions for several years. In other sectors, such as | | | | 'Retained Layer'. |
| telecoms, outsourcing is in its infancy. In these sectors | | | | * A specific and enforceable Service Level |
| key questions are being asked about what functions | | | | Agreement between you and your Outsourcing |
| should be outsourced; various criteria are used to | | | | Service Provider. |
| inform these decisions - are these functions core? Are | | | | * Ongoing review of the strategic business drivers for |
| they critical? Whole industry norms are being | | | | outsourcing. |
| challenged in the telecommunications industry with big | | | | Frequently companies spend so much time during the |
| players such as 3 outsourcing their entire mobile | | | | analysis, design and implementation phase of an |
| networks. | | | | outsourcing project that they neglect to dedicate time |
| Outsourcing in the telecoms sector has raised one | | | | to the importance of ongoing management of the deal. |
| specific interesting regulatory issue. Licenses governing | | | | It is only through consistent management of the |
| spectrum allocation in the mobile space usually stipulate | | | | service provider that the client organisation will retain a |
| that mobile operators must retain 'functional control' of | | | | high level of understanding and expertise in the |
| their network. The telecoms sector is highly regulated; | | | | outsourced function. (This needs to be achieved whilst |
| network operators cannot evade this regulatory | | | | allowing the Service Provider to get on with managing |
| responsibility - it cannot be shifted to service providers. | | | | the delivery of the service whilst the client focuses on |
| Indeed this issue raises interesting questions for the | | | | the governance). |
| dominant outsourcing providers - no doubt some | | | | It is important to ensure that specific service levels are |
| caution may need to be exercised in the future to | | | | agreed between you and your service provider. |
| ensure they are not perceived to have de facto | | | | Service levels should be as precise and business |
| control of any network. | | | | relevant as possible - avoid ambiguity and use a small |
| More broadly speaking all companies should retain | | | | number of significant measures. Where possible try to |
| strategic control over the direction of all outsourced | | | | ensure the numbers are baselined against the industry |
| functions. All aspects of your core business will have | | | | norm. |
| key dependencies on the functions you have | | | | A carefully designed and implemented Service Model |
| outsourced - this means you need to be in a position | | | | will ensure that you remain in control of your business - |
| to control the outsourced operation at a strategic, | | | | a well trained management layer and a clear, |
| governance and operational level (up to and including | | | | Business-relevant Service Level Agreement are key |
| termination where the outsource is no longer aligned to | | | | components of the Service Model. |