Whether you look at the bright side (Australia’s economy posted an annual growth rate of 4.3 per cent) or the bad side (the ASX and dollar are playing tricks on us), economic uncertainty will likely continue to hover as the new financial year dawns. Organisations are still treading lightly, and budgets now face new hurdles such as extra energy costs brought on by the carbon tax.
What’s an IT department to do? Take inventory of your technology and make the right investments to help your organisation grow and save costs in the long-term.
Check what you already have
Simple advice, but how many organisations actually take stock of software and hardware sitting idle that they could be using or that they no longer need? Conducting a software asset management programme can help organisations get a better handle on software needs. You likely have multiple versions of the same software at your organisation, which could be increasing costs and adding a support burden to the IT department. A SAM programme also helps you track software licensing investments to ensure they are cost-efficient. On the hardware front, there could be buy-back and trade-in options for hardware and special savings through your vendors over the course of the year.
Streamline your outsourcing
Outsourcing certain IT functions can save your organisation up to 30 per cent and allow greater flexibility during peak and off-peak times. Opting for a pay-as-you-go model and amenable contract ensures you can match the level of service to your budget and business needs; there’s no need to commit to a year-long agreement that you might no longer need three months in.
Choosing one provider that supplies a variety of services such as help desk support and managed print can help streamline the IT environment and offer lower costs than might be accomplished through using multiple providers. One government agency in New Zealand was able to achieve significant cost savings by reducing the amount of IT partners to one provider that could supply a pay-as-you-go model, which allowed the organisation to ramp up during times of peak demand. Cutting the IT fat also enabled the agency to gain better consistency in IT operations and avoid duplicating certain functions.
Clear up extra costs with server consolidation and cloud
Gartner found that 60 per cent of the Australian IT budget goes toward operations and infrastructure. Consolidating servers is one way to cut down this spending by as much as 20 per cent; cloud is another. Organisations can diminish infrastructure costs and increase efficiency of operations through cloud investment. Research has shown businesses can save up to 25 per cent on IT costs over the first three years by outsourcing data storage, critical business applications and email to the cloud. Businesses facing heat from the carbon tax can also decrease their footprint by 30 to 90 per cent using cloud for business applications thanks to the drop in data centre heating and cooling costs and reduced hardware use.
Opting for a cloud services provider with pay-as-you-go models, flexible contracts and colocation services allows businesses to slowly transition into the cloud while retaining the ability to scale up or down and shorten or extend their agreement depending on fluctuating business needs.
How is your IT department saving money?
Australian IT spending will finally increase in 2012 after declining the previous two years, according to Gartner. The rise is modest – 1.9 per cent, which likely means your IT department will still be asked to do more with less while continuing to drive innovation. A department seeking to become more strategic can’t risk using IT budget challenges as an excuse to delay key projects and investments that could bring big wins to the enterprise.
Target indirect funding streams
Remember, the rest of the business doesn’t easily see the value of the lights-on functions the IT department supports. That’s why funding will come from IT management delivering original, revenue-producing technologies that support other business units and add competitive advantage. One way to stay innovative on a tight IT budget is through tapping into the other departments at your organisation to leverage their parked funds; the Gartner research indicates more CIOs plan to help other business units like sales retain and gain customers in 2012 by developing technology-enabled solutions. How much time are you investing here?
Implementing technology solutions through other departments means IT can set itself up for more funding down the line through these business units. At this point, you’ve most likely already initiated the discussion with senior management at your enterprise regarding aligning the IT department with business goals. If you’ve been a part of this strategic dialogue and continued consistently delivering on your aims, you should be better positioned to gain access to these other funding steams. Put it this way: if IT doesn’t leverage these other funds with trends like the consumerisation of IT taking hold, then other departments will, and before you know it, your efforts will not be required.
Dive into the deep end to reduce expenditures
We know capital is hard to come by in Australia, but there are ways to shift some of your expenditures into the operational realm. For instance, moving infrastructure to managed cloud services can cut large capital costs by ending the need to obtain new hardware and additional software licences. But many CIOs put off these cost-saving shifts because they’re scared of the risk, the integration challenges or the service management requirements.
These fears really come down to how these projects are planned, allocated resources and overseen. Approaching these large, transformative projects with a detailed plan aligned with your overall IT-business strategy can make them less overwhelming. As you would do with other projects, put risk mitigation and management processes in place and implement a design, test and build approach to develop and deliver these solutions. These IT management processes can cut down the risk of having to make major changes or undo most of the work down the line.
Leverage managed services
Did you know 100 per cent of the top 300 companies in Australia are currently using outsourcing in some area of the business? Even if IT budgets decrease or remain flat, organisations are expected to continue investing in managed services, such as managed print, systems management and service desks. Several of Datacom’s managed services are available on a pay-as-you-go model so IT departments can scale resources as project needs change. Many of these services are also offered through flexible contracts so your department need not commit to six months or a full year when budgets and business needs don’t require it.
We’re all feeling the budget squeeze. It doesn’t mean the IT department should stop being agile, innovative and efficient. Look at budget challenges as something to work around instead of something that prevents you from continuing to meet business demands.
Peter Wilson is Datacom’s Managing Director of Systems for Australia and Asia. He helps ensure Datacom offers and fulfils technology solutions globally.
Peter strives to drive the success of the business across locations by strategically directing Datacom’s future. His vision ensures every Datacom location is equipped with the world-class knowledge and capabilities necessary to help enterprises transform their IT department.
“High performance” could mean a lot of things to a lot of people. It can also be measured in different ways: in the contact centre setting, is high performance the friendliness of the agent responding to a call, the accuracy of the answer provided or the resolution of a call involving a very disgruntled caller?
COPC standards, to which Datacom contact centres adhere, define high performance in the contact centre as the ability to deliver benchmark levels of quality and service whilst at the same time continually driving efficiencies to reduce cost. Service is directly related to speed, which involves answering an enquiry in an efficient period of time, but it doesn’t overlook the quality of the solution delivered in favour of quickness. Quality is usually measured in terms of the correctness of the answer provided and whether or not it was the best solution for the customer.
I’ve found in my experience in the contact centre industry and in taking the COPC registered coordinator training course that achieving high performance in this outsourced environment involves a multi-layered approach. All the different disciplines and knowledge sets you need to guarantee high performance in the contact centre are interlinked and part of the same engine. Like any engine, if one small part isn’t working to the peak of its performance, the whole engine may run badly or not at all.
For instance, proper coaching of contact centre staff is crucial, but it’s only half the story. Alton Martin, a mentor of mine and the CEO of SPOT Consulting, says, “There are no bad people, only bad processes”. Having the right people is necessary, but so is having the right systems in place so those staff members succeed. Good outsourcing companies operating call centres will also analyse the data they get from their telephony and CRM systems, from aggregating the results of their quality monitoring and from their customer satisfaction surveys and really use that to find the root cause of an issue.
For instance, Datacom consistently monitors quantified performance by investigating at the operational management level to ensure we meet our targets and go through a formal process for any missed metrics. We also regularly audit all program performance through our internal team of COPC-registered coordinators who conduct full reviews against the requirements of the COPC standard bi-annually. On top of that, we also have our external COPC audits.
Datacom has seen quantified performance increase everywhere and the impact is reinforced by the great end-user satisfaction scores that we see as a result of adopting the COPC practices. We’ve also been able to offer many of our clients real reductions in total cost of ownership as a result of our ability to drive costs down without compromising service and quality. As a reduction in TCO while maintaining or bolstering brand reputation is a chief aim of many organisations looking to outsource, guiding high performance through COPC remains the industry standard.
Andy Cranshaw is a senior contact centre operations manager and performance improvement consultant with nearly 30 years of experience in the customer contact industry. He serves as the GM of Professional Services for Datacom BPO in Kuala Lumpur, Malaysia, where he has resided since 1997.
Andy started his career in 1983 as a telemarketing representative and graduated through various roles in contact centre operations in the UK, including team leader, data analyst, ops manager and head of training, before moving to the client-facing side of the business in 1993. A well-respected educator in customer contact and CRM, Andy regularly speaks at South East Asian conferences and has delivered numerous training courses for contact centre managers in Asia, Australia, the US and the UK.
Australia’s a great place for widespread cloud adoption – but many enterprises don‘t care.
Despite being ranked No. 2 in the world for cloud readiness by the BSA Global Cloud Computing Score Card, adoption of private cloud in the Infrastructure as a Service (IaaS) delivery model has slowed, according to Longhaus research. Part of the issue could be related to enterprises wanting to retain control over their virtualised infrastructure by keeping it in-house. But beyond control, is there ever a reason to maintain these resources – and associated costs – onsite instead of outsourcing to a cloud services provider? Peter Bainbridge, Business Manager of the Solutions Group for Datacom, weighs in.
First of all, why do you think businesses are shying away from private IaaS?
“It’s fear – fear of the provider messing up, downtime and the provider not taking as much care of the infrastructure as if it were its own. Data sovereignty is an issue too – I wouldn’t trust someone with my entire business's data if they were just a faceless entity on the internet.”
Are those fears founded?
“Not from our experience. We make guarantees around everything a customer is concerned about, and they are financially-backed in the form of service credits. Customers know where their data is stored and managed, and they participate in a partnership with us, which means they can come and visit us whenever they like.”
In terms of IT skills, what is required when hosting infrastructure in-house vs. when IT outsourcing?
“In a complex in-house infrastructure, you need a Jack of all trades. Or you’re going to need lots of specialists who are expensive and they may not be used to their full capacity. And then what happens when they want to take leave, or they’re sick? I’ve also seen examples where people work just that little bit slower, or keep an environment back a little, to ensure long-term employment and a sense of comfort.
Outsourced IaaS provides a pool of resources where you get the specialists you need to support your system, but you only pay for what you actually need. Using a pool of resources means customers don’t have to worry about sick leave or resource management or skills maintenance and training; and it comes with a huge benefit you don’t get when in-sourcing. For example, at Datacom, our team is constantly exposed to a wide range of environments and technology choices and are encouraged and rewarded for bringing relevant efficiencies and transformative ideas to our customers.”
What are the pros of keeping infrastructure in-house?
“There aren’t many actual benefits. Some IT managers may think it’s best to keep infrastructure in-house if you have static requirements, meaning workloads that won’t fluctuate. But most enterprises today are managing dynamic workloads. Some IT managers may also keep everything in-house to maintain their autonomy. When you introduce IT outsourcing to the picture, it takes away much of the control from the IT manager, and he may see that as a threat to his job. But what IT managers don’t realise is that by outsourcing infrastructure, they can become more strategic in-house. They can become an IT enabler that drives business value from IT, directly contributing to the company’s success with a long-term, sustainable view on IT services.”
Some enterprises believe you have less responsibility when you move to IaaS. What’s the truth?
“You can’t outsource risk. If your IT outsourcer fails you, you’re responsible. You still keep the burden of risk – you have to manage your vendor so your business outcomes are always front of mind, always the focus and drive everything you and the vendor do.”
How do you best do that?
“By actively participating in SLA reviews, keeping communication channels open, engaging in strategic IT planning, getting involved early, keeping an open mind for the outsourcer to come to you – they can bring innovation to things you didn’t know you needed or services or requirements you might need down the line.
At Datacom, we make managed services easier by proactively engaging at all levels of the partnership. We have a service delivery manager monitoring the client's day-to-day performance to set objectives, an account manager to oversee the strategic overall relationship and an executive sponsor within Datacom advocating that client's needs. We meet monthly to discuss SLA performance, regularly talk about operational issues and have quarterly discussions around innovations and IT strategy alignment.”
When is a good time for a business to really look at making the transition to IaaS?
“It’s when you’re undertaking a transformative process. Outsource your existing infrastructure in the lead-up to cloud, because then your outsourced vendor intimately understands your environment before transforming it, reducing risk, downtime and cost when you make the leap into cloud.”
There’s no end to the business goals you can accomplish with a good outsourcing provider: reduced overhead, better efficiency, access to new skill sets and improved customer satisfaction. A bad provider, on the other hand, can completely cripple your business in ways ranging from a toll on your bottom line to inhibited strategy and growth. You can avoid these pitfalls by choosing a business process outsourcing provider that gives you value-added service and aligns with your business needs.
1. Offers no added value
To get the most out of an outsourcing relationship, you should get more than just what you need. There’s a simple reason for this: your business needs will likely change throughout the duration of your contract, and a truly flexible provider can adapt to continue delivering a quality service. Value-added services will enable the right provider to help in additional areas should you need it down the road.
The wrong provider might also fail to decrease your Total Cost of Ownership or even drive up your costs asking for more money every time you want something outside the scope of work. Having a true partnership with the provider where you are working seamlessly together to reach common goals and objectives will increase the depth of the relationship and deliver better value for money.
2. Shows poor relationship management
The right partner will provide support through the implementation of formal performance reviews and by setting out clear KPIs, which are aligned with delivering your desired business outcomes. If you get the wrong provider, you may get stuck waiting days or weeks to get a response to a crucial call or email, costing both time and money. According to a poll by the Computing Technology Industry Association, nearly 28 per cent of businesses say poor communication was the main cause of a failed outsourcing project.
It takes relationship management from both ends to make the outsourcing experience successful. Early on in the business process outsourcing provider relationship, make it very clear what your preferred methods of communication are – teleconference, email, phone or face to face – and schedule in regular meetings to ensure you receive the right insight and analytics throughout the length of the contract.
3. Doesn’t fit in with your business culture
A global KPMG study found 60 per cent of businesses said poor fit was the main issue with their outsourcing relationship. The wrong provider won’t know what your business does or how to deliver work in alignment with your mission and core values. Choose a provider that offers a client-branded BPO experience and complies with the highly-rated COPC standards of performance management for the customer contact industry.
4. Struggles to meet objectives
Does your provider know the ultimate goals of the outsourcing project? Do you?
One third of businesses say they fail to continually assess projects they’ve outsourced to ensure they remain consistent with the outlined objectives, says a study by ESI International. While part of the success of the project rests on your company providing the right details, selecting a business process outsourcing provider that lacks experience delivering results-driven ROI in a holistic way means an inevitable uphill battle when it comes to meeting goals. The right outsourcing company will shun off-the-shelf solutions in favour of a plan tailored to your business needs and that can be adapted as objectives change or the market shifts.
5. Fails to understand business complexity
BPO is no easy task, and any provider that thinks otherwise is not the one for you. You are very likely outsourcing mission-critical data, which brings up complexities around risk management, data security and privacy, compliance and quality assurance. Not only must the business process outsourcing provider deeply understand your business and customers, but it must have an accurate sense of what it will take to transition your processes and possess the technical know-how to manage them.
The right provider knows your outsourcing solution will require ongoing review, refinement and reengineering to continually meet your business objectives. A COPC-certified company will be able to provide the framework and benchmarking tools necessary to set the standards for outsourcing operations.