The main challenge with these alternative approaches can be summed up in one word – complexity. For all the faults, real or perceived, with the current model, it is well-known and delivers, at least in theory, a simple management environment. Typically this means “one throat to choke”, or at least a small number of throats.
By contrast, these alternative approaches potentially involve more service providers and it is likely that the end-user organisations will be responsible for managing this more complex environment.
In other words, end-user organisations are considering a trade-off: moving from a simple management environment that they consider slow, unresponsive, expensive, and constrains access to technologies, to a more complex management environment they consider to be more agile, more cost effective, and that allows access to innovation.
In reality, there are risks to both models. The current model has a number of devils we know, and the risk is that it constrains an organisation’s ability to execute its wider IT strategy because it either can’t afford the solution it requires, or it can’t be made flexible enough. The alternative approaches have a number of devils we don’t yet know:
- Will the use of new third parties really deliver agility and flexibility?
- Will fragmenting expenditure mean no service provider cares enough to deliver excellent service?
- Will the additional complexity be manageable, or will it simply create additional admin, bureaucracy and opportunities for mistakes?
Whilst these are unknown, there certainly are some known challenges organisations considering an alternative operating model will need to address:
People and skills
“Right sourcing” is likely to mean managing more service providers and coordinating an end-to-end service built from multiple components, but where no individual service provider has end-to-end responsibility. This means ensuring you have the right people with the right skills, and is likely to require additional headcount, and the ability to recruit, train and retain skilled people. This will be particularly challenging if your organisation trains them in new technology areas
The alternative approaches are likely to mean new service boundaries, and it will be incumbent on the end-user organisation to monitor overall performance, which is likely to require the deployment of new tools to achieve this. Again, there is a people and skills element to this as well as sourcing, deploying and managing toolsets
There are a whole set of service management principles that will need to be established and managed to effectively control a multi-vendor network environment
There is a perception that an outsourced model carries risk from the end-user organisation to the service provider. The ambiguity is that many organisations with an outsourced solution don’t feel that this risk allocation has ever occurred. However, “right sourcing” removes this ambiguity and makes it clear that the risk resides with the end-user organisation
One argument put forwards by the traditional telecoms service providers is that “right sourcing” aims to create a better version of today’s solution. By contrast, these providers argue that they will resolve that problem themselves with a whole suite of next generation services which are fundamentally better than any individual end-user organisation can deliver themselves
However, there are potential benefits:
- The telco nirvana solution remains theoretical and off in the future, whereas an end-user organisation can “right source” today
- Whilst challenging to create, the business case is quantifiable and trackable, whereas the costs for the telcos’ preferred solution is often too expensive, or not available today
- End-user organisations can access the services and technologies they require today, without waiting for a telco to productise them