Posted by: Arun Gupta
CIO, One-stop-shop, outsourcing
The IT industry has many types of vendors; some focusing on niche solutions, some specializing in specific technologies or domains, some who offer a menu of products / services ranging from infrastructure to applications, and then there are large diversified companies who do everything from consulting to implementation of technology solutions or packages backed by support services in a local, offshore or multi-location model. The big guys manage all kinds of requirements and bring to the discussion table a comprehensive long-term engagement model.
Different vendors set different expectations on what they can deliver; the niche providers do not promise a breadth of services, they stay focused on their expertise. The big ones claim to have expertise across the legacy to contemporary and cutting edge; they have industry practices and business consultants who profess incremental to transformational change capabilities. You name it we can do it; even if you cannot put a name to it, we will find a way to do it!
Complexities in governance
The large one-stop-shop engagements typically begin with setting of scope and expectations on delivery, timelines, and quality of service, rewards, penalties, force majeure, arbitration, cost, escalations and a lot more. The larger the scope, or the longer the time period of the contract, the governance becomes complex. We know that Total or Strategic outsourcing can cover everything; in recent times though the number of such deals has been dwindling.
So it was an interesting debate when a few CEOs on a panel berated the one-stop-shop companies giving it a new twist. Consider you wanting to reach a far-far away destination and the only option is to go by bus. Every bus gets you there, some are slower than others, some offer many comforts through the journey; the cheaper ones just get you there. Depending on what you can afford, there are many options to choose from. Caveat is once you have bought a ticket, a change is difficult and painful.
When someone advertises ‘one-stop-shop’, the conventional understanding is that I get from where I am to the final destination with no stops with the advertised and agreed comfort. Reality as we know is not always as advertised. A CEO remarked on his journey with one of the global biggies; he signed up for a long journey wanting to focus on his business. Very quickly he was on the discussion table with the bus driver, conductor and the entire fleet management company.
Why is my journey so excruciatingly slow? Why is the transformation promised not happening? When will I see any impact to my employees, stakeholders, customers, or for that matter any efficiency to business operations? Whatever happened to the pre-sales promises made by the various function heads of your company on various domains and technologies? Pat came the answer, “we are a one-stop-shop company; we go one stop at a time. This is what we promised; we did have a driver change and a breakdown; that is part of the contract. We meet defined service levels.”
Devil lies in the detail
Both are right in their frame of reference; so where is the problem? I believe that any such engagement should have common definition of reference points with clear understanding of step-by-step process, impact and governance. Otherwise the semantics of the one-stop-shop can be painful for everyone involved, the deliverer and the recipient. The bus is still moving but not in the way that makes the journey a pleasure. CIOs will be at the receiving end if there are such gaps.