To Outsource Or Not to Outsource - Lessons

To Outsource Or Not to Outsource - Lessons Learned from Hawkins CIO, Hannes van Zyl

Posted by Beyond Recruitment

We recently sat down with Hannes van Zyl, Hawkins CIO, to get his insights on leadership in IT strategy. In his eyes, one of the biggest mistakes you can make is to take the decision to outsource IT functions purely to remove cost, as he believes this is, as a general rule of thumb, a more costly option. Here’s why:

Whilst on the surface it may be cheaper, projects variations is where the cost lies and, this is often not uncovered in discovery stages/planning and proposal submissions.
Outsourcing providers appear to make most of their profit on add in services after the initial implementation. Hannes cautions against not having a transparent and set pricing structure agreed for any additional services in your agreement, as negotiating after the fact will put you in a disadvantaged position and these costs will not be forecast/budgeted as part of your project plan.

The Pros and Cons

Pros

Cons

Deliver a piece of work with minimal disruption to people’s core roles.
Specialists that will deliver specific deliverables where you do not have capacity /this capability in house.
A fresh lens and ability to deliver solutions which may not have been considered, given exposure to multiple other projects/businesses and no ‘baggage’ or history.

Less understanding of your business than internal employees and less trust ‘in the bank’ than employees who have these key stakeholder relationships and may influence change more easily.
Cost – unforeseen costs as the projects evolves and;
Risks where stakeholders are not engaged internally and change is not adopted.
Failure to set clear milestones/objectives and deliverables from the outset and who and how these will be measured.

Key Lessons Learned:

The only thing that changes when you outsource is the people you deal with have gone through same process but with a different provider. It’s all about relationships – when there are people changes at your providers’ organisations, that initial understanding is clouded and doing business becomes more difficult.

Choose partners carefully and ensure they are the right fit for your business – Do they know your business and are they aligned to your vision/key objectives
Make sure to specify the contract, your account team, your points of contact/ownership and accountable individuals.
Clearly document the scope of the project or arrangement, and have a thorough understanding what's in and what's not.
Know how to tackle any issues if and when they arise.
There is no right or wrong – just what's right for your business. Making sure you have a clear vision of what you need is crucial, otherwise you will not be able to take advantage and achieve your goals.

Above all, you need accountability; in services levels, the milestones set by the business and who and how will you monitor these (all outlined in black and white on a contract). Be selective about what you outsource and keep the focus on what you are trying to achieve, and what value you wish to add to your business.

But what about recruitment?

When and why should you use a Recruitment partner for contracting solutions vs a consultancy/outsourcing provider?

On demand talent options: People bring specialist skills and experience that upskills and offers new strength to your existing team and project.
Engaging specialists: Areas where you need people with specific skill sets and want the flexibility to scale up and down to meet business needs, projects, or cover headcount gaps. Alternatively, you might want to bring in a fresh set of eyes and ideas, but still own the outcomes.
Manage risk: this allows you to flex the size of your workforce up and down, working around notice periods and the option to extend or finish contractors according to unforeseen changes in a project, or as required to meet business demands

For more advice on managing your workforce, or to further discuss our contracting solution offerings, contact Beyond Recruitment today to talk about value and solutions that fit your business.