We recently sat down with Hannes van Zyl, Hawkins CIO, to get his insights on leadership in IT strategy. In his eyes, one of the biggest mistakes you can make is to take the decision to outsource IT functions purely to remove cost, as he believes this is, as a general rule of thumb, a more costly option. Here’s why:
- Whilst on the surface it may be cheaper, projects variations is where the cost lies and, this is often not uncovered in discovery stages/planning and proposal submissions.
- Outsourcing providers appear to make most of their profit on add in services after the initial implementation. Hannes cautions against not having a transparent and set pricing structure agreed for any additional services in your agreement, as negotiating after the fact will put you in a disadvantaged position and these costs will not be forecast/budgeted as part of your project plan.
The Pros and Cons
Key Lessons Learned:
The only thing that changes when you outsource is the people you deal with have gone through same process but with a different provider. It’s all about relationships – when there are people changes at your providers’ organisations, that initial understanding is clouded and doing business becomes more difficult.
- Choose partners carefully and ensure they are the right fit for your business – Do they know your business and are they aligned to your vision/key objectives
- Make sure to specify the contract, your account team, your points of contact/ownership and accountable individuals.
- Clearly document the scope of the project or arrangement, and have a thorough understanding what's in and what's not.
- Know how to tackle any issues if and when they arise.
- There is no right or wrong – just what's right for your business. Making sure you have a clear vision of what you need is crucial, otherwise you will not be able to take advantage and achieve your goals.
Above all, you need accountability; in services levels, the milestones set by the business and who and how will you monitor these (all outlined in black and white on a contract). Be selective about what you outsource and keep the focus on what you are trying to achieve, and what value you wish to add to your business.
But what about recruitment?
When and why should you use a Recruitment partner for contracting solutions vs a consultancy/outsourcing provider?
- On demand talent options: People bring specialist skills and experience that upskills and offers new strength to your existing team and project.
Engaging specialists: Areas where you need people with specific skill sets and want the flexibility to scale up and down to meet business needs, projects, or cover headcount gaps. Alternatively, you might want to bring in a fresh set of eyes and ideas, but still own the outcomes.
- Manage risk: this allows you to flex the size of your workforce up and down, working around notice periods and the option to extend or finish contractors according to unforeseen changes in a project, or as required to meet business demands
For more advice on managing your workforce, or to further discuss our contracting solution offerings, contact Beyond Recruitment today to talk about value and solutions that fit your business.