Outsourcing-as-a-Trial: How IT Leaders Today Are Choosing Vendors

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IT and operations teams are more aligned than ever before, leading to significant gains in their digital transformation agendas. However, due to a lack of industry expertise, many IT vendors are slow to catch up. As a result, IT leaders are experimenting with vendor trials as a way to vet partners and maintain digital transformation momentum.

In the 2020 State of the CIO report, 89% of IT leaders report increased alignment between IT and operational groups, and a growing number of line-of-business executives acknowledge the role IT has to play helping to identify parts of the enterprise to transform.

These same leaders continue to look outside their organizations to fill talent gaps and fuel new projects. The resulting spike in outsourcing, however, has uncovered a problem: most IT vendors are still inexperienced in their clients’ business practices.

With the IT outsourcing market projected to grow by $98 billion from 2020 to 2024, there are two key questions that need to be answered: What are vendors lacking, and how can business leaders find the right transformation partner?

 

Why Are Vendors Slow to Catch Up?

Traditional outsourcing firms still largely adopt the “heads-on-sticks” approach: employing armies of people to simply “do the work,” focusing on individual tasks over the broader mission. Synonymous with offshoring, this method of outsourcing seems to favor lower costs, but vendors are far less likely to have industry experience, let alone the tools to add value as a partner in modernization.

In order to compensate, one path tech companies are taking is to hire industry expert consultants. While effective at the relationship level, many organizations suffer a significant loss of knowledge once a project is handed over to a technical team. This causes project lag, increased costs, communication breakdowns, and other issues stemming from inexperience. Instead, businesses are looking for partners who have relevant expertise in their industries.

 

The Search for a Partner in Transformation (on a Trial Basis)

According to Forrester, IT service providers will increasingly differentiate themselves not just in their industry expertise, but in the assets they can deploy to accelerate a company’s transformation journey. The vendor’s new role will be defined by their ability to consult and service. Top performers will help shape change and will also work with clients to measure outcomes, and, under certain circumstances, be willing to negotiate payment on the basis of delivering on their promises.

When selecting long-term partners, IT leaders are finding trial periods with vendors valuable. As a proving ground, a trial allows trust and confidence to build around shared objectives.

“You can successfully accelerate your firm’s real digital transformation by picking strong vendor partners with the right assets and experience.”
Spark Sustainable Innovation with The Right Transformation Partner
Forrester Research, 2019

 

Rapid Transition: A Proven Alternative to Underperforming Vendors

With traditional outsourcing on one side of the spectrum and expert industry consultants on the other, organizations need vendors that fit in the middle — vendors that help organizations identify their critical IT needs, then fill those gaps.

That’s why we created Rapid Transition, a three-phase process to help organizations shift away from underperforming vendors without sacrificing downtime or impacting customers. It’s a partnership model that combines 17+ years of technical and industry expertise with a consultative approach to strengthen IT.

Rapid Transition includes:

  • A trial project to set quality and delivery standards
  • Multi-week onboarding with onsite (or virtual) collaboration
  • Critical IT upgrades such as code quality, security and workflow improvements
  • Solution implementation in automation, agile and DevOps, and transformation consulting

 

Rapid Transition is not just about replacing a vendor. It is a method to continuously improve critical IT functions that support operations with measurable outcomes. To learn more about this solution and how it can benefit your organization, download the one-pager below.

 

IT outsourcing

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