Your IT outsourcing budget is tight. How do you prevent service quality from taking a hit?
Even with a tight IT outsourcing budget, it's crucial to maintain service quality. Here are strategies to achieve that balance:
- Vet and select vendors with a strong track record of cost-effectiveness and reliability.
- Negotiate contracts with clear performance metrics tied to service quality.
- Employ rigorous project management to keep tasks on schedule and within budget.
What strategies have you found effective in balancing your IT outsourcing budget with service quality?
Your IT outsourcing budget is tight. How do you prevent service quality from taking a hit?
Even with a tight IT outsourcing budget, it's crucial to maintain service quality. Here are strategies to achieve that balance:
- Vet and select vendors with a strong track record of cost-effectiveness and reliability.
- Negotiate contracts with clear performance metrics tied to service quality.
- Employ rigorous project management to keep tasks on schedule and within budget.
What strategies have you found effective in balancing your IT outsourcing budget with service quality?
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Vinay Puri(edited)
I have been in these circumstances during a pandemic. The following worked: 1. Repriortized the key objectives 2. Reevaluate the tools and plan consolidating the use cases 3. Engage vendors with clear agenda and discussion; followed by renegotiating SLA and taking more support 4. Automate the use case candidates 5. Finally consolidate the tool sprawl True effort and this magic worrks
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Most of the budgets get consumed addressing poorly addressed previous problems. Focus on root cause analysis, and prevention of recurrence. Test your Root Cause Analysis - did you change the process , the technology or work practice - if not root cause was not done. This thinking slowly leads to non linear staffing. If your contract is locked both in staffing and SLA there is little scope for cost improvement as automation will only add cost.
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Another factor is working with your vendor during contracting. There may be lower cost options you hadn't considered. One example is replacing penalties with exit clauses. Another is less strict SLAs. 4 9s is way more expensive than 3 9s. The difference is not significant for most workloads, but the savings can be dramatic.
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Define the work scope very clearly. Choose low cost destinations to support. Define the support team structure very optimally. Automate as much as possible. Self service capabilities can be very cost effective
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Outsourcing budgets are always tight as part of their nature. It is key not to waste money without value added e.g. a quick win this year but having to spend exponential money next year. Prioritize vendors with long-term potential, because exiting one relationship and entering the next is the most stupid way to burn money. Take a closer look at the history and character of a potential vendor's leaders, especially their willingness to develop together with their customers in a long-term perspective. Listen to the solution approach of a potential vendor from a short-, medium-, and long-term perspective as they know their business better than you do. Think in bonus-/malus-rules, as vendor-driven improvements will not occur if not appreciated.
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On a tight IT budget? Here’s how to keep service quality intact: Focus on Core Services: Invest in areas that impact business outcomes directly, ensuring your essentials are covered. Select Reliable Vendors: Partner with outsourcing providers known for their expertise and long-term value, so you don’t sacrifice quality. Utilize Automation: Streamline repetitive tasks with AI and automation tools for consistent, efficient results without inflating costs. Communicate Clearly: Establish clear expectations and maintain open channels with vendors to avoid costly misalignments. With the right approach, a lean budget can still deliver top-notch results.
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Achieving service quality with a tight outsourcing budget is an art of managed services, some first things first: 1.Ensure Offshore resource pool in a tier 2 city or even work from home distributed resource model. 2. Articulate and curate the Back to back SLAs with internal vendors 3.Adopt factory model / service lines and work based on fte model. 4. Quality management with online metrics & dashboards with a NOC model
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Very important we need to focus on the critical services, list down the risk involved and assess the impact. Monitor the implemented controls and analyse the same.
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In this situation, it’s critical to relook into outsourcing strategies. It’s imperative that vendor partners are aligned to new objectives and ready to engage for the ideas of cost reduction without impacting quality and outcome. There are always ways and means to reprioritize resources to achieve end goals with clear objective, plans to achieve and continuous monitoring, it can surely be achieved.
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