Information systems outsourcing: an opportunity to accelerate digital transformation?

Outsourcing your information systems? Perhaps the health crisis has revealed the need for IT outsourcing within your company. When it comes to outsourcing information systems, it's important to consider both the opportunities and the risks, to ensure that you adopt the right practices.

outsource information systems

37%

of CIOs believe that the ROI of outsourcing their IT infrastructures to the cloud is higher than that of traditional outsourcing, hosting and managed services.

Do you need to outsource your information systems?

According to the latest Cloud Observatory survey by cloud observatorythe health crisis of 2020 led to a 3.7% reduction in investment in France. As a result, CIOs have had to rationalize their IT project portfolios and reduce operational management costs, while keeping strategic projects under control. CIOs need to move towards agile governance(see our full report).

However, IT infrastructure spending is set to grow by a further 4% overall, driven by business demand for cloud services. IDC estimates that the cloud will be the most dynamic segment in 2021, with the market growing by over 10%.

Indeed, in order to ensure that their information systems keep pace with their short- and long-term development, companies are adopting agile, high-performance digitalization strategies. For this, the cloud is one of the most suitable levers. A survey of 85 companies conducted by Markess International shows that 37% of CIOs believe that the ROI of outsourcing their IT infrastructures to the cloud is higher than that of traditional outsourcing, hosting and managed services.

But while the cloud has its advantages, it's also vital to ensure the security, stability and efficiency of outsourced services.

Optimized costs

By outsourcing its IT infrastructure and applications, the company frees itself from the need to invest in expensive hardware and software, as well as the costs associated with maintaining them.

Greater flexibility

The pay-as-you-go principle (monthly subscription or services billed on demand) in Cloud outsourcing enables companies to respond to temporary needs or peaks in activity in a highly reactive way. It also enables you to keep your infrastructure and software up to date, while reducing the need for substantial CAPEX investments.

Quality services and materials

Cloud service providers offer companies the opportunity to automate and industrialize their processes. They also enable them to benefit from the very latest technology in tools and applications. Tool upgrades are generally automatic, and the risk of obsolescence disappears.

Accessibility

The cloud means you're no longer dependent on a particular geographic location, hardware or operating system. All data is centralized and accessible remotely.

Leveraging resources for innovation

By opting for outsourcing, companies no longer devote as many resources to system development and maintenance, and can allocate more resources to their core business and innovation.

The risks of outsourcing information systems

Dependence on the service provider

Outsourcing can make a company dependent on its suppliers. In fact, outsourcing requires the acquisition of new skills to master the relationship with the provider: knowledge of service models and deployment models (public cloud, private cloud, hybrid cloud...), knowledge of risk analysis and of cybersecurityknowledge of risk analysis and cybersecurity, proficiency in auditing and managing service providers, ability to lead an implementation strategy...

Data hosting

Data may be hosted on different geographical sites by different service providers. The risks are considerable in the event of an economic, political or health crisis in the countries where the service providers are located: loss of physical and remote access to equipment, loss of access to application data, etc.

Best practices for successful IT outsourcing

Risks can be controlled by following "best practices" for outsourcing information systems.

Define your needs

It is essential toidentify the activities concerned by the information systems outsourcing project at an early stage, and to clearly define the needs of each. These needs must then be formulated very precisely in the service contract service contract with the service provider.

Choose the right service provider(s) to outsource your information systems

The company must ensure that the service provider under consideration has the technical skills and customer support practices suited to the company's needs. It must also be vigilant about the country in which the data is hosted in order to guarantee its security in compliance with the RGPD.

Evolve your organization to control the service provider relationship

It is important to keep an eye on how the outsourced service is managed, and adapt its organization to this new activity. In the short term, it is therefore necessary toacquire the skills required to manage an outsourced servicewhile offering development opportunities to in-house teams. Whether in terms of skills or culture, outsourcing leads to a fundamental transformation of activities, which implies :
  • Allocate in-house technical and human resources to ensure that the service provider's offer matches the company's functional and technical requirements.
  • Set up supplier performance measurement indicators (service availability, response time, security level, service quality, etc.).
  • Regularly re-evaluate the sourcing strategy in line with changing functional and technical requirements and indicators.
  • Control the risks of remote access Implementing secure gateways dedicated to outsourced service access and remote maintenance is a must.

In conclusion, outsourcing certain IS is an opportunity

The health crisis has enabled the most digitalized companies to react more reactively than others (telecommutingsupplier/customer/administration exchanges, remote access to data, etc.).

From this point of view, and if any were needed, it has been a powerful revelation of the importance of digitalization. For companies that decide to initiate or accelerate this transformation now, outsourcing certain IT services is an opportunity to move faster. Provided they adopt the right practices.

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