Think solutions not problems for out-tasking

Outsourcing is maturing: not only the deals on offer from service providers at the various levels, but manufacturers' approaches to them. The so-called offshoring revolution has changed some of the dynamics of outsourcing: reducing cost and boosting performance and cost-effectiveness in what's become a competitive global market remain primary goals, but there's also a drive for new control and visibility. As manufacturers review offshoring, they're having to consider existing contracts in light of what is in some cases bitter experience. And what's coming out of that is a concept now being called 'sourcing'. It's jargon, of course, but taking it on board can lead to a happier outcome, and it has to do with both your business strategy and your IT infrastructure. It's about not merely passing on your problems – but instead solving them, and then looking for a service provider. Alex Blues, director of outsourcing advisor Orbys Consulting, reckons manufacturers that do it on average see a 20% operational saving. So if your IT operations, for example, are not efficient, it's probably best not to outsource them as is. On the other hand, if you have an efficient IT infrastructure, savings may result from engaging a third party to run them. Feel the burn The point is that the impulse to outsource often comes from pain felt at the financial director level. So from a strategic perspective, the message is you need to seek to resource an enterprise to achieve goals, not just chop out costs and problems. And that means reviewing what you need and then assessing how and who should manage the various aspects of your infrastructure. Beyond that, the arguments are the same: outsourcing offers scalability that few in-house teams can match, and there are the skill sets and uptime guarantees of your service level agreements. "The key benefit of outsourcing is the economy of scale it can bring to a business, providing best of breed security, infrastructure, applications management, peace of mind and a professional, always available services team," says Stephen Scott, managing director of managed services provider NaviSite Europe, which includes Hyundai Car UK among its key clients. Interestingly, Scott comments that the biggest challenge for IT outsourcing companies like his is the security blanket effect. Many companies would rather see the lights blinking in the data centre and a small army of in-house support personnel than trust a third party. There is, of course, a balance to be struck. Witness Ford's recent move to bring much of its IT management back in house, and to go for judicious out-tasking. Others are tackling the opportunity slightly differently – and including whole functional departments. BAE Systems, for example, is extending its use of outsourcing, started in 2002, with service provider MPL to take over its technical engineering, including aerostructure design and stress analysis for advanced defence and aerospace systems. NC programming and production planning were also part of that deal, which was worth around £2.4 million and included work on the Typhoon fighter aircraft. Then again, when Jaguar Land Rover wanted an integrated knowledge management solution to serve as a repository for its technical information via the company's Global Technical Reference (GTR) website, it outsoured to First Option, which deployed its AeZ e-commerce platform. The result is consistent and detailed technical information now available in real-time to the manufacturers' global dealer networks. First Option claims to have enabled Jaguar and Land Rover to publish its data via its GTR website, dramatically reducing the cost of knowledge sharing and increasing customer loyalty for both brands. Around 250,000 document requests are received each month, serving 15,000 users world-wide.