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Change management essential to outsourcing

Regina Pazvakavambwa
By Regina Pazvakavambwa, ITWeb portals journalist.
Johannesburg, 05 Feb 2015
Incorporating change management will ensure IT outsourcing delivers on the expected benefits, says Wipro's Shailendra Singh.
Incorporating change management will ensure IT outsourcing delivers on the expected benefits, says Wipro's Shailendra Singh.

A change management policy should be an essential component when initiating IT outsourcing.

This is according to Shailendra Singh, business director at Wipro Africa, who notes, when it comes to implementing IT outsourcing, most organisations treat the venture as a pure cost-reduction exercise - underestimating the changes this will cause for both IT teams and business units.

Incorporating a change management strategy will ensure IT outsourcing delivers on the expected benefits, like access to scarce skills, cost reductions and leveraging industry best practices, he adds.

Brian Anderson, head of business development for SunGard SA, states the operational efficiency to be gained by outsourcing can be further enhanced by smooth transition and seamless migration.

Having a change management strategy is fundamental to the success of IT outsourcing arrangements, says Singh, adding it must be part of the service level agreement and must be budgeted for.

The strategy will help the business leaders explain to employees why the outsourcing arrangement is happening and the expectations around service delivery phase, says Anderson. As business continues with the IT outsourcing process, it needs to continuously update the workforce on the challenges and changes coming in, he adds.

"Part of the change management strategy is educating the employees about changes to processes - organisations have a tendency to not fully grasp the importance of helping the employees during the process of transition," says Anderson.

He points out employees need to know the reason for the changes and why, for example, a process that took two clicks to operate now needs one. The process of change management will allow the business to function once the company transitions from hosting IT-enabled business process in house to outsourcing them, adds Anderson.

"It's really important to implement a change management strategy - risk of failure increases dramatically if the outsourcing agreement is not well designed, negotiated, managed, controlled and executed."

Without a change management strategy the business will not fully understand the impact IT outsourcing will have on all parties within an organisation, says Singh. The organisation will run the risk of creating processes that fail to deliver the expected cost reductions and other benefits, and could put business leaders off implementing further outsourcing projects in the future, he adds.

Therefore, it is crucial for companies to not only obtain the services of an IT specialist to design effective technology solutions, but it must also partner with change management experts, says Singh.

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