Technology leaders have long struggled with the often-competing pressures to support innovation, maintain operations, and drive down costs. This competition has created a constant search for the right way to utilize outsourcing in its many forms. The Mobile Thought Leaders held an online panel to discuss best practices and insights on what we have learned from years of balancing the competing forces – with varying results.
The panel included Bob Burkhart from Nationwide Insurance. Nationwide has made remarkable progress in digital transformation across all parts of their operations. Their effort has been in response to executive prioritizing, and appropriate budgeting, of such efforts. Even with this kind of support (the kind that many of us dream about) Bob and his team faced numerous challenges and made their share of mistakes that provide great insights for the rest of us.
Chad Nordby, joined the panel from Vox Mobile. His long resume includes a view of technology services on massive scale and global reach, having completed projects that included hundreds of thousands of endpoints and solutions that covered more than 30 countries. These are not the kind of projects where you go it alone.
The discussion was hosted by the Chief Strategy Officer for Mobile Thought Leaders, Jim Haviland, who travels the world working with MTL members and sponsors on building mobile and digital transformation programs and trying to sort out what goes wrong.
A BRIEF HISTORY OF IT OUTSOURCING
The panel reviewed what we have learned from decades of trial and error, and then, maturing of outsourcing models. While the place and value of pure “your mess for less” outsourcing is harder to identify these days, both Managed Services and the as-a-Service (xaaS) models are pretty clear means of reducing risk, increasing access to expertise, and allowing focus on where the value is.
Figure 1: The evolution of outsourcing
Managed Services, defined as outsourcing plus expertise, tends to allow more specialization but requires more vendor management and some expertise around what it is you are buying so that you pay for the right SLAs. The up-side is that you can expect that you and the provider will share the benefits of optimization over time (lower costs, better service).
The xaaS model takes the next step in packaging, providing a standardized solution, usually at a standardized price. The xaaS benefits usually are that you can initiate the service quickly and with little in the way of prerequisites, aside from money, and that you can expect the service to ramp up and down more easily.
Vox Mobile offers both managed services and, for some products, true xaaS packages. For instance, you can purchase pre-installed cloud access to VMware software from Vox Mobile that includes the hardware, networking, licenses, installation, and on-going maintenance of the full solution, as well as someone else to handle when things go wrong. You can also buy Apple hardware products from Vox Mobile in a Device-as-a-Service model, with all the services, repairs, and insurance included with the hardware, all for a monthly fixed price.
Figure 2: Vox offers Apple products in a Device as a Service model, including all aspects of the Managed Services products optimized to the solution voxmobile.com/simple
WHEN TO CHOOSE XAAS
In general, the panel agrees that there is a place for all the outsourcing models in a modern enterprise, but the ability to utilize xaaS – when to get in and when to get out – is critical for enabling Digital Transformation.
There are some specific drivers that make the xaaS approach more beneficial to an organization, specifically:
- When you are less interested in absolute cost optimization and more concerned about uncontrolled costs
- When you are uncertain of the scale of your need
- When the solution appears to require expertise that you don’t have access to.
- When the solution appears to have complexity or hidden “gotchas” that you want to avoid having to sort out during the early phases
- When the newness of what you are doing creates anxiety in your organization or there is someone culturally opposed to the change.
|Drivers||The Problem(s)||How to Decide|
|Cost||You need Risk Reduction and Agility||– Determine loaded cost
– Project into the future
– Bring it back once the risk is gone
|Scale||You don’t know how much you need||– Rough calculations of best and worst case
– Bring it back if it is too small to be efficient aaS
|Expertise||Internal Experience too limited to be reliable||– What do peers have in place?
– Start with 3rd parties
|Complexity||You don’t know what is needed for a full solution?||– See Expertise, is this a new function?
– Look for the “unknown unknowns”
|Culture||History or structure make a good outcome unlikely||– Early in your Digital Transformation
– Stuck in a “in-source” culture
THE NATIONWIDE STORY
During the event, Bob Burkhart shared some of the details of the Nationwide story. Perhaps most interesting were the themes and lessons that he drew from the 6 years (and counting) of driving mobility and transformation.
- Minimum Viable Product (MVP) & Iteration work: Nationwide took an agile approach to their solutions, launching new solutions quickly with minimal features and then iterating, adjusting, and adding quickly. This taught the whole organization to think about software and solutions differently and know that they could participate in a meaningful feedback loop.
- How to get and give feedback: The alignment between IT and the business was only as strong as their ability to understand each other’s thoughts and concerns and to constructively participate in the feedback loop.
- 3 Keys: Education, Marketing, and Communication: Perhaps the biggest challenge for IT was the realization that the value of their work would not be realized unless they developed skills around marketing to their users, educating on an on-going basis, and developing strong bi-directional communications strategies with other departments.
- Pain points are not the whole story: Early on, new solutions would often (usually) fall short of all the hopes and aspirations of the stakeholders and users. It was very important to not focus on what was wrong but to educate the business on the process of making things better, together.
Amongst the steps used to achieve their transformation, Nationwide has worked with Vox Mobile’s consulting group, taking advantage of the Enterprise Mobility Blueprint and the Mobile Maturity Assessment to help give structure and focus to their plans.
Figure 3: Vox Mobile Blueprint
NEW ROLES AND OPPORTUNITIES
While outsourcing often involves someone losing their job, the types of things that MTL members say they have replaced with Managed Services or xaaS tend to lead to changes in internal roles rather than losing them – from maintaining infrastructure to participating in innovation.
In particular, all the panelists told stories of great additional value being added to projects through analytics. xaaS-model services tend to be the richest with mineable analytics data and the very best ones provide data-driven, actionable insights. In general, the staff that used to just keep projects going can shift their attention to making them better.
Hear the full conversation and gain access to the content here: http://bit.ly/2nhx88A