Bill Fowler
Bill Fowler

Increasingly, competition is coming from more than traditional outsourcing providers. “The Business” (your customers) have unprecedented access to a range of technology options.

Available options range from infrastructure provided “as a service” from the likes of Amazon and Microsoft, to business process outsourcing to complete solutions such as Salesforce.com.

In the past, IT organizations had some control through requests to connect to the corporate network, options available today have no such requirements. Businesses can purchase basic infrastructure services or complete solutions “in the cloud” and never have a need to inform IT. To be successful, IT must understand these options and how they compare in terms of cost, reliability, security, etc. “Build versus Buy” is no longer limited to Applications – this is an evaluation that is applicable for nearly all IT services today.

Understanding the options available to the customer is critical to the continued relevance of the traditional IT organization. In fact, it may be argued that the traditional IT organization is doomed if it doesn’t evolve to more of a service broker model. If IT is to continue as a service provider, it must look like one to the business. This means moving from a cost allocation mentality to a price for service mentality.

  • A simple example highlights the difference. Three business units share the cost of an application running on a large, expensive server, each paying a third of the cost. One business decides to migrate to another solution leaving only two business units sharing the cost of the application and the large, expensive server. Traditionally, IT would increase the allocated costs to the remaining two business units by 50% each. But this isn’t how a business operates. A business builds capacity and then has the pressure to sell that capacity.
  • Formal commitments from “the business” may be required to ensure appropriate return on investments.
  • In order for IT to remain relevant to the business it must understand the market in which it is competing, and its customer’s expectations.

To learn more about Wavestone US’ services, visit http://www.wavestone.us/capabilities/

 

Bill Fowler
Managing Principal

Bill Fowler has designed and led large complex consulting engagements for Fortune 500 clients and has worked on some of the world’s largest outsourcing agreements. He is committed to helping clients develop effective, sustainable sourcing solutions that align with their strategic and operational objectives.

Benchmarking Best Practices for Value Realization

Jun 15, 2021

The COVID-19 pandemic has led many organizations to revisit their sourcing strategy in order to: recalibrate their in-house vs. outsourced portfolio, identify further value and concentration risks in the outsourced portfolio, ensure resilience of operating models (including business continuity), and identify and mitigate any compliance risks with the new ways of working.

What the CFO Needs to Know About the Convergence of ITO and BPO Services

Jun 09, 2021

Many organizations have turned to outsourcing to help with cost reduction and improve operating efficiency. Historically, we IT leaders thought of two types of outsourcing: IT Outsourcing (generally referred to as ITO) and Business Process Outsourcing (generally referred to as BPO).

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