Canadian CIOs Disappointed With IT Outsourcing

A recent survey of Canadian chief information officers expressed disappointment in IT outsourcing. The feedback the CIOs provided present an exceptional opportunity for IT companies to respond and hone their services and customer service to better serve corporate clients.

The annual CanadianCIO Census, sponsored by IT World Canada, shows that CIOs are dissatisfied with the investments they’ve made in outsourcing. Among the findings:

• Twenty-five percent of CIOs surveyed note that the outsourcing relationships had fallen short of expectations. That’s similar to the 2017 results, where 28 percent reported the same sentiment.
• “As a service” computing is taking the place of many traditional outsourcing products.
• Data indicate that more companies are investing in in-house staff, despite continued projected growth in outsourcing services. Gartner expects the outsourced IT market to reach $363 million by 2020 with 6.3 percent annual growth.
• There is a gap in expectations versus reality when it comes to what an IT provider does.

It’s evident that the opportunity to deliver better services is high.

What Are the Gaps in Expectations Between IT Providers and Clients?

Too often, businesses that outsource believe that once the contract is signed, the provider is going to take care of everything. Executives may not understand the need to establish and maintain an ongoing dialogue and relationship with the IT provider.

This disconnect raises an important consideration for IT company leaders. It’s imperative that you’re transparent with clients about how to make the relationship work. Many IT providers position themselves as virtual CIOs and tout their ongoing advisory services. IT companies should establish their executives as thought leaders who will be available for ongoing consulting and brainstorming. Reinforce that your commitment to the client includes recommending new technologies and solutions as they emerge and analyzing performance data to support improvements that will advance business goals.

What Is Needed for Transition Planning?

When you present a plan to refine, add or replace technologies and processes, there’s a critical need to be sure that project management is clearly outlined. The client and provider need to be on the same page about what the transition to new solutions will mean, scoping out the sequencing, significant milestones, timelines and impact on operations. Transition and project planning are essential to managing expectations from leadership, employees and customers.

The project management plan also needs to focus on information sharing and knowledge transfer. IT companies can position themselves as comprehensive service providers by focusing not only on what happens on Day but what will be done to ensure the client’s organization will be ready and prepared.

When Is Customization a Problem?

Many IT providers tout their ability to customize solutions for each client, taking into account the unique needs, challenges and opportunities. This is an important marketing point and should continue to be front and center. However, customization can often cause frustration.

For example, when a new solution needs to fit the way the client does work, there needs to be a lot of dialogue about processes. Sometimes, the client has not documented those processes, the processes are inconsistently applied within the organization, or existing documentation is inaccurate. At that point, the outsourced service provider often has to build new documentation, a time-consuming process that can add additional hours and cost to a client’s bill. Clients that are not expecting that expense can become unhappy quickly.

IT providers can avoid these issues by being clear at the front end about time estimates and identifying typical unforeseen problems that might add to the final project costs.

How Can IT Providers Help Clients?

One approach to improving the experience for clients … and their satisfaction levels … is to suggest a three-pronged approach to management and governance:

1. Encourage clients to train their staffs on how to work best with your company. Offer to help develop that training and help staffs prepare for change.
2. Suggest the client’s company build a governance structure. A management committee, for example, could draft a charter defining the key metrics that determine the outsourcing efficacy and how problems will be addressed.
3. Recommend the client appoint relationship managers that have the authority to work closely with the service provider and report back regularly to company leadership.