I've been writing about outsourcing the past few years, and if I had to offer one key insight it'd be this: The biggest predictor of success is closely examining your processes before shifting them to an outside provider. Too often, organizations don't get a good handle on their own processes (other than they're a mess) and still somehow believe an outsider will be able to "fix" them. This often results in the kinds of outsourcing disasters experienced by several state governments over the past year, including Texas, Indiana and Virginia.
In my post detailing outsourcing problems in Texas and Indiana, I cited a quote from a UK government official who oversaw an outsourcing initiative that resulted in the successful introduction of biometric fingerprinting on visas issued through its embassies and consulates. He said:
Make sure you understand all the business processes -- work though the detail. We made sure we understood the minutiae of the technology we were buying.
Amen, brother, especially on the first part of that statement. Like I said, the importance of understanding your own processes cannot be overstated.
That's why it makes perfect sense to me that the IT Infrastructure Library (ITIL) can help organizations improve the outcome of their outsourcing initiatives. In fact, other process-improvement frameworks should have a similarly beneficial effect, since closely examining your processes is a primary requirement for using just about any framework.
A SeachCIO.com article describes how Procter & Gamble's use of ITIL contributed to the success of mutiple outsourcing projects, largely through its emphasis on clearly defining processes, says Daryl Goetz, the company's global IT Service Management (ITSM)/ITIL manager. (The existence of Goetz's role tells you P&G is serious about ITIL.) Having clearly-defined processes is especially important for companies using a multisourcing model, as P&G does. P&G considers ITIL so key to its outsourcing efforts that it even seeks out outsourcing partners that also use ITIL. Says Goetz:
Anybody thinking about outsourcing, my very first requirement would be [to determine] how ready you are in terms of standard process across the environment you want to outsource.
A few months ago I interviewed Sukhbir Jasuja, a founding partner and CEO of ITpreneurs, which provides learning solutions for IT Best Practices Management training. Before starting ITpreneurs, Sukhbir worked for P&G in various IT management positions. As global project manager, he was directly involved in the implementation of best practices frameworks such as ITIL and in the implementation of the company's follow-the-sun operational support model. Like Goetz, he stressed ITIL's role in P&G's outsourcing initiatives. He said:
... P&G has shown a lot of benefit, not just in cost savings, but strategic benefits in the way they have structured their IT organization. ITIL gave them a better understanding of what their business required, because they had already done the homework for the ITIL implementation. They knew their service-level requirements. They could more easily discuss that with an external vendor. They had aligned their processes worldwide. So the way the IT organization used to function and interact with the business was consistent across the whole world. That made the outsourcing significantly easier. ...
Tough economic conditions like those we've experienced over the past 18 months prompt many companies to take a closer look at outsourcing and at frameworks like ITIL, thanks to their potential to cut costs and boost efficiencies. Rob Whiteley, VP and research director of infrastructure and operations at Forrester Research, told SearchCIO.com that a recent Forrester survey indicated growing interest in infrastructure outsourcing. And anecdotal evidence suggests more companies are looking at ITIL and Six Sigma. With the structure imposed by those methodologies in place, Forrester believes "they're in a [better] position to outsource than in the past five years."