Managing an outsourced IT organization will require a set of guiding principles. There are pros and cons to outsourcing a large portion of an IT organization. Benefits include quick access to technical expertise and subject matter experts, lower IT costs by maintaining a flexible headcount and project-focused resources, and the ability to scale-up operations rapidly. These pros are easy to realize, but to ensure a company’s partnership with an external IT vendor doesn’t indirectly create problems that outweigh the benefits, IT Management should develop a governance model with the following guiding principles for managing an outsourced IT organization.
These guiding principles serve to provide structure and direction. Without them, it's a little like riding a horse without a bridle. You'll get somewhere, yes, but it might not be where you intend. With guidance and direction, it's much easier to get from point A to point B.
Maintaining internal accountability is important for any organization’s success. What is internal accountability? In simple terms, the difference between responsibility and accountability is that even though both parties may play a part in a task, project, process, etc., the accountable party will always be liable for the success or failures of all individuals involved. Usually, the accountable party is upper-level management or senior team members.
How does this translate into managing an IT partnership or outsourced employees (vendor support teams)? By having internal IT employees maintain accountability for short-term success (e.g. project execution or CMDB maintenance) and long-term success (overall support of business functions), they are automatically more likely to work closely with the outsourced support teams to proactively monitor output and identify and correct any misalignment in expectations.
Additionally, holding internal accountability will help keep the “brains” of an organization in-house, providing the practice the ability to grow, develop its own strategic vision, and make un-biased decisions. A common mistake is letting an IT vendor partner manage IT applications or infrastructure in a silo. When it comes time for capital planning in these situations, leadership is often unsure of how to best allocate their capital spend because internal teams are further removed from their own asset’s challenges, risk levels, and metadata.
The first way to start streamlining asset and change management practices is by using a singular source of the truth when it comes to IT asset inventory and data. Most IT organizations already have an ITSM tool, and mature organizations should take advantage of its CMDB component to capture asset information. Complications arise when vendor partners begin using alternative data sources for billing, analysis, etc. Additionally, ensure internal employees ultimately “own” the CMDB data set, even if heavy vendor support is required, i.e., maintain internal accountability within asset and change management practices.
Second, work with IT partners to establish streamlined practices and guiding principles for managing assets and data. Evaluate any best practices the vendor brings to the table and align on what works best for the company as a whole, leveraging their practices as needed. Through collaborative workshops, trainings, or other types of facilitated sessions, create alignment between internal and external resources on how asset and change management will be performed. This means:
IT vendor partners will come with their own management style and driving forces. Learning how external employees operate and how to properly manage them can seem overwhelming at times, even after both parties (internal and external) are on the same page regarding the items discussed above under the second guiding principle.
One easy way to implement ongoing management of outsourced IT resources is by developing key performance indicators (KPIs) and setting expectations early on regarding what threshold teams are required to meet. When setting KPIs, make sure they are quantifiable and objective. Also, determine up front who will be tracking the measures and communicating the results and specify the implications of not meeting set expectations. Lastly, be flexible in determining what the thresholds for “success” are, especially when situations arise that are out of the organization’s control (e.g. cyberattacks).
Depending on the roles your outsourced employees have within your IT organization, some example KPIs include:
This concept may be an obvious solution, but setting up feedback loops to support the way IT manages and works with their vendor partner is often overlooked.
Similar to how any practice would manage their own employees, ensure there are ways for your vendor partner to participate in discussions driving change—especially since they are often “in the weeds” of operations. As a manager of any level, it is critical to establish feedback channels to evaluate what is and isn’t working, what additional support management can provide, and thoughts on any innovative ways to improve. Don’t forget to open the loop to vendor input as well.
Trenegy has worked with many organizations to select, design, and implement technology solutions to support a successful IT transformation. For more information, reach out to us at info@trenegy.com.
Trenegy is a non-traditional consulting firm based in Houston, Texas.