There are several outsourcing models that can be applied to both core and non-core businesses alike when facing challenges in defining the most suitable strategy for going forward. In general, these models are clustered in areas such as:
- Pricing
- Engagement
- Topology
- Delivery
- Transformation
We’ve talked about the strengths of Outsourcing, and its impact on the way businesses can control their costs (primary goal), scale their processes, generate savings, access talent pools, gain services tailored to their specific needs, provide a better experience to their customers, expand progressively and of course, to establish a sustainable competitive edge.
From Transition to Transformation
We all know about the enormous growth potential of digital solutions for businesses, how they open up new opportunities, encourage development, and enable sustainability. Digital transformation could be critical for small businesses going forward. It would benefit their culture, operations, productivity, and overall performance. Setting up the right framework for transforming your organization will hugely impact how well it will run.
The actual path of the entire project includes several phases:
- Contract signing
- Pre-Transition
- Transition (Lift & Shift (migrating your apps to the cloud); Transformation to future state 1;)
- Steady-state
- Transformation (Future state 2, Future state 3, etc.)
Transition Management
The key segment of the organizational change towards digital transformation, as well as its implementation through systematic planning, is known as Transition Management. Its main goal is to reach desirable (phased) future states of your organization, without affecting the continuity of its business processes.
Transition management represents a time-tested framework of the actual approach, as it encompasses multiple levels of processes, learning, experimentation, and long-term thinking. However, the effective transition is quite challenging. It requires the significant involvement of practically all key stakeholders, both directly and indirectly.
Current success rate percentages of digital transitions and transformations are not that bright. Some say that up to 70% of all private-sector transformations either fail to meet targets, take too long, or lack sustainability. And the public sector? It’s nearly at 80%.
Transformation
Digital transformation is a process of getting to the actual (envisioned) end result, where a certain company reinvents itself by embracing digital technologies and using them to enhance processes that support its key operations and customer experience, as well as to build an organizational culture and compete on the market.
It starts with the company’s current state and should end with its projected Future states (1-n). The future state is the actual ideal end result of your digital transformation plan.
There are many good practices for high quality in digital transformation. Some include the holistic approach, finding a solid basis for comparison, the use of proven and efficient technologies, cybersecurity improvement, hiring the right talent, developing user-friendly systems, lots of data analysis, focusing on the customer, and using proper resources. Or you can just rely on all-in-one solutions, like Titan SIM.
Choosing the right framework can be tough, whether you’re a business beginner or a pro. Fortunately, there’s plenty of tried and tested methodology. Notable ones include Gartner or McKinsey frameworks.
Up for a Cultural change?
Digital transformation doesn’t mean uplifting your organization tech-wise. It’s about the ability to innovate, leverage the power of both traditional and innovative systems and keep up with the constant change. In order to achieve it, the entire organization should be aligned with its transformation strategy and actively participate in following the process.
Vendor management?
Leaning towards digital transformation most often means your organization will face managing multiple technology vendors and suppliers, regardless of the industry. These particular relationships could play a significant role in achieving your company’s goals going forward. Therefore, terms such as proper analysis and feedback, clear expectations, long-term goals, and excellent communication can be crucial for maintaining the right course.
Risk transfer to the supplier?
Key service delivery risks are supplier opportunism, insufficient process maturity, failure to retain in-house capability, inadequate contract (scope creep), business uncertainty, knowledge transfer (productivity impact), data security, and loss of business knowledge.
The engagement model implications need to be considered to mitigate this risk and transfer them (where possible) into supplier responsibility. Maturing engagements means delegating commercial risk of service delivery to suppliers, ensuring they are commercially incentivized to deliver quality and innovation.
In Managed Service engagements, service provision is outsourced to the supplier, and the internal business function transforms from service provision to service management.
Managed Service Transformation Checklists for business functions are proven tools to mitigate risks in transformation projects. These best practices are provided in several key areas such as commercial awareness, conflicting objectives in negotiating outsourcing contracts, supplier tactics, simple tips to minimize commercial risks, or general service requirements. These are helpful toolsets to ensure mature and low-risk 3rd party engagements.
Conclusion
As technology continues to progress and businesses remain competitive as never before, digital transformation is not something to consider, rather a must. Luckily, there are solutions and advisers you can rely on.
Are you interested?
