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Outsource magazine: thought-leadership and outsourcing strategy | May 29, 2017

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How much does it cost not to have to talk to you?

How much does it cost not to have to talk to you?
Richard Cooper
  • On February 12, 2015
  • http://www.technology-trust.org/

This may seem like an odd question to ask a service provider, but I think it sums up my feeling towards many of the IT services– such as desktop support, network provision and basic application maintenance — that are regularly outsourced by organisations. I spent a number of years benchmarking technology services answering questions such as, “is our data centre cost effective?” or “are we getting value for money from our desktop maintenance provider?”. The trouble with the benchmarking process is that it is very good at establishing and comparing costs. However, it does not do a particularly good job of establishing value.

There is a tendency in the technology world to focus on cost. I believe that this is because value is often hard to quantify. This is particularly true of the services that tend to get outsourced where their complex nature both technically and contractually leads to a heavy focus on the question, “am I getting value for money?”. This in turn leads suppliers to spend a lot of time balancing cost savings against meeting contractual service levels. There is a knock-on effect on the purchaser in managing their business expectation of the service and in changes the supplier wants to introduce. From my point of view this is time-consuming and distracts from the real purpose of my role: helping charities advance their mission through technology.

Let me put it another way: I may get a few brownie points for reducing my costs by a few per cent, but I get a lot more from helping improve the effectiveness of our services so we can support more charities using fewer resources or by improving our fundraising.

One of the principles I apply to technology services is Herzberg’s Motivation-Hygiene theory. While this is a very simplistic model, I think it sums things up well. Essentially, the theory says there are certain things we must have to live: food, shelter, warmth etc. and then there are other things that motivate us. If our hygiene needs remain unsatisfied, we will never focus on our motivational needs. Technology can be split into things every organisation should have – a solid infrastructure, an effective service desk – versus the things that make a competitive difference to the organisation, e.g. a deep data-driven understanding of buyer behaviour or the ability to roll out an online marketing campaign in response to an unexpected external event.

Once the services the organisation consumes are divided into hygiene or motivation categories, you quickly realise that you want the “hygiene” services to work without you noticing. I want to get up and eat breakfast in a warm house, I don’t want to have to worry about this and I certainly don’t want someone ringing up every week asking me for a meeting to discuss my developing food and warmth needs and to review how my current provision is matching up to my expectations.

But in the business world, this is exactly what happens! My service providers want “service review meetings” on a monthly basis. They want to present endless charts on their services. They want to discuss the development of needs. Others want me to switch services, usually on the promise of lower costs and higher quality, ignoring the pain of switching. Me? I want a service that delivers and the only thing I want you to tell me is the cost is going down. I don’t want those calls any more than I want some energy company ringing me at home with false friendship and their latest “introductory tariff”.

What is often confusing when looking at the business world is that what was once a competitive advantage is now a basic ‘hygiene factor’. For example, creating the ability for knowledge workers to operate effectively wherever they are in the world. This opens up a global talent market for a consultancy to recruit from – something that a few years back, only a handful of organisations could do. Now pretty much everyone can and if you cannot, you are at a serious disadvantage in the consulting market because you are limiting the talent pool you can tap into.

So I want to know how much it costs to not have to talk to you. To receive a service that delivers, does not take up my time, and allows me to get on with the really important stuff of delivering strategic impact through the application of technology.

Comments

  1. David

    A thought provoking article especially as I live on the other side of the fence advocating a Governance regime to encourage dialogue and communcation via Service Reviews.
    I consider the model described by Richard as a desired outcome of good governance since without the initial mechanisms required to build trust and mutual understanding, there are few clients that would embrace such a model from the get-go nor suppliers that could provide it.

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