previous experience with traditional outsourcing may ease cloud adoption

Alfredo SaadIT Sourcing Consultant

Previous experience with traditional outsourcing

may ease cloud adoption

https://br.linkedin.com/in/alfredosaad


A surprising statement ?Facts that justify itLessons learned … in chapters

Identification of business drivers linked to the outsourcing decision

Definition of implementation strategyProvider(s) selectionNegotiation of contractual terms and conditionsPlanning and implementation of services transitionDefinition of governance process and relationship

with and between providers

Final remarks


A SURPRISING STATEMENT ?

It may sound surprising to some people that the probability of success in a cloud adoption project can be increased if the buyer organization has had a previous experience in the traditional outsourcing area.

More surprising yet: this may be true even if such previous experience was not completely successful. Which facts support such conclusions?


Under an IT services outsourcing perspective, cloud adoption is merely one of the possible (and surely promising) options for the external contracting of IT services by an organization.

Many aspects are common to all existing alternatives, and the long matured and learned lessons during a previous exercise may be a relevant facilitator for the exploration of such innovative option.

This will avoid the same mistakes be made and will bring more effectiveness to the decisions taken along the cloud journey.

FACTS THAT JUSTIFY IT


Such matured and learned lessons are normally identified during each step of the previous experience:

Identification of business drivers that motivated the decision to outsource

Definition of the implementation strategy Definition of the operational model to be deployed Provider(s) selection Contract terms and conditions negotiation Services transition planning and deployment Contract governance and relationship among all

stakeholders

LESSONS LEARNED ... IN CHAPTERS (1 DE 5)


Many of the activities performed in each of these steps are similar, no matter if we consider the traditional outsourcing or the cloud scenario.

To these similarities, be sure to add the applicable cloud specific components



It should be emphasized that, on the contrary, if lessons learned are not adequately considered, success probability of a cloud project can be significantly decreased.

More surprising yet, this trend can be perceived long before cloud specificities are added to the discussion.



Naturally, a cloud adoption project can be successful even if no previous outsourcing experience existed, but ...

... there is no doubt that the task will be harder because lessons will have to be learned in-flight, frequently in a trial-and-error process that will confront many unknown and/or unexpected hurdles.



The decisions to be taken along the cloud adoption journey and whose hit rate can be significantly increased as a consequence of the accumulated previous experience, for each step of the process, will be presented in the next slides



Typical traditional outsourcing business drivers are cost reduction, focus on core business, access to specialized skills, business processes transformation and

standardization, regulatory and compliance requirements

Which of the above business drivers are still relevant in the cloud scenario for your organization?

IDENTIFICATION OF BUSINESS DRIVERS LINKED TO THE OUTSOURCING DECISION (1 DE 2)


Which “new” business drivers, typically aimed at in a cloud project, must be added and with which priority relative to the “old” ones still considered relevant?

“New” business drivers, typically prioritized in the cloud scenario are market-share increase, time-to-market decrease, customer experience improvement, apps innovation and workforce mobility, among others.

IDENTIFICATION OF BUSINESS DRIVERS LINKED TO THE OUTSOURCING DECISION (2 DE 2)


How the current scenario (which can be a mix of traditional outsourcing - ITO and/or BPO - and workloads still kept on-premises) will be modified as a consequence of the cloud adoption?

Which workloads will be moved to the cloud environment and with which progression rate? Which workloads will be kept, temporarily or permanently, in their current environments (ITO, BPO, on-premises)?

DEFINITION OFIMPLEMENTATION STRATEGY


Which typical selection criteria on traditional outsourcing stay relevant on cloud scenario?

Among them, we can name: proven provider capacity, robustness and innovation of solution

proposed, up-to-date technological infrastructure, available skills, delivery experience, list of customers and customers satisfaction.

PROVIDER(S) SELECTION (1 DE 2)


Which “new” typical selection criteria on cloud scenario (sometimes associated to a certain cloud market immaturity) should be added and which is their relative priority to the “old” relevant selection criteria?

Some we could name are: finance and structural robustness, available infrastructure geo dispersion, ability to integrate with competitors’ solutions, security and compliance infrastructure and

procedures.

PROVIDER(S) SELECTION (2 DE 2)


Which previous critical negotiation factors became irrelevant on cloud scenario?

Among them, we can name: assets management and the transfer of human resources from the buyer to

the provider

NEGOTIATION OF CONTRACTUAL TERMS AND CONDITIONS (1 DE 3)


Which negotiation factors keep critical, although they should be negotiated in light of the cloud specificities?

We can name: service level agreements and associated penalties, services charging metrics, volume consumption verification, contract cancellation and conflict resolution procedures.



Which “old” negotiation factors became especially critical on cloud scenario?

Some of them would be: legal contract jurisdiction, responsibility concerning security and compliance

issues, consequences concerning service failure, data integrity and recovery



Which previous factors remain relevant on cloud scenario?

Some of them can be named: joint planning and limits of responsibility between

buyer and provider during transition, transition team definition and communication procedures between parties during

transition

PLANNING AND IMPLEMENTATION OF SERVICES TRANSITION (1 DE 2)


Which factors became critical on cloud scenario?

Some of them are: the integration of services provided by a big

number of providers and the dissemination among users of information

concerning charging and additional services request

PLANNING AND IMPLEMENTATION OF SERVICES TRANSITION (2 DE 2)


Which “old” elements keep critical on cloud scenario?

We could name a few: structuring of buyer governance function, selection of skilled governance team components

and definition of executive and operational meetings

periodicity and agenda

DEFINITION OF GOVERNANCE PROCESS AND RELATIONSHIP WITH AND BETWEEN PROVIDERS (1 DE 2)


Which additional elements appear as critical on a cloud scenario?

Among them we could name: definition of tools, skills and procedures needed for a cloud

management function, aiming at agility, effectiveness and automation during new

deployments, additional services request, cost control and performance monitoring

DEFINITION OF GOVERNANCE PROCESS AND RELATIONSHIP WITH AND BETWEEN PROVIDERS (2 DE 2)


As shown, a previous experience on a traditional outsourcing project lets organizations anticipate how to deal with many of the aspects involved in each step of the adoption of the cloud alternative.

The lessons learned along this previous experience permits a solid base be built for cloud deployment, over which all specific issues of the cloud scenario must be mandatorily and adequately considered.

FINAL REMARKS

previous experience with traditional outsourcing may ease cloud adoption

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