Outsourcing and Cloud Computing: Understanding the Cloud

On May 30, 2013, in Outsourcing, by Business Development Group

organizations that outsource IT services or even those that are planning to do so should consider and understand the effect that cloud computing is having on for IT outsourcing businesses

As outsourcing in business and Information Technology booms, it also explains how effective outsourcing is for organizations in terms of service delivery. Outsourcing solutions that organizations are receiving from outsourcing providers greatly affects their growth. A good testament to that is the continuous increase of numbers of companies willing to invest to outsourcing.

According to a recent post at Deloitte Insights’s website, organizations that outsource IT services or even those that are planning to do so should consider and understand the effect that cloud computing is having on for IT outsourcing businesses. The same post shows the hyped advantages of cloud computing over traditional solutions such us cost, capacity, scalability, and accessibility.

What is Cloud Computing?

According to webopedia.com (a free online dictionary for words, phrases and abbreviations that are related to computer and Internet technology), the word “cloud” (also phrased as “the cloud”) is used as a metaphor for “the Internet,” so the phrase cloud computing means a type of Internet-based computing, where different services (such as servers, storage and applications) are delivered to an organization’s computers and devices through the Internet.

Cloud computing is becoming a popular service that has gained good impressions to corporate data centers. The cloud basically provides data centers the ability to operate like the internet and compute resources which are accessible and shared in a secure and measurable manner.

Difference of Cloud Computing and Traditional Outsourcing

Here is an example of one key difference of traditional outsourcing and cloud service from a recent post of The Society for Computers and Law (SCL) website authored by Kuan Hon and Christopher Millard:

Active Agents VS Passive self-service usage of resources

Traditional outsourcing of data processing, e.g. payroll processing, involves commissioning agents, who are provided with data and tasked with processing the data actively for the user according to the user’s mandate. The agent may itself engage sub-processors to assist with this processing.

However, with public cloud services, users ‘rent’ pre-packaged IT resources from providers and then process data themselves in self-service fashion, using infrastructure/resources supplied by the provider. Infrastructure providers do not actively act as agent processing data for users but, at most, passively store data which users choose to store on the provider’s infrastructure ready for retrieval by the user when needed.[12] Such providers may be active in maintaining and supporting the infrastructure and environment within which users process their data (discussed below), but the data processing is generally performed by users operating the provider’s resources on a self-service basis, not by the provider.

(SCL is the leading UK organization for legal professionals advising and practicing within the IT sector or advising in a commercial context with a brief that includes such issues as IT, data protection and e-commerce)

Related Article:

The Cloud and Outsourcing: A New World Awaits

Cloud Computing vs Traditional Outsourcing – Key Differences

Cloud Computing Explained

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By Giovanni Dall’Orto (Self-photographed) [Attribution], via Wikimedia Commons

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Innovation and Outsourcing Best Practices

On May 24, 2013, in Outsourcing, by Business Development Group

Outsourcing as supposed helps a company with the non-critical business operations, but with the services it gives, it can transform a business and can be a catalyst of innovation to the company and even to the customers

What we see with outsourcing today is that it become highly progressive and apparently shows substantial growth in the coming years.  Outsourcing provided companies the being of cost reduction, productivity increase, and business savings. These, however are product of a well-realized outsourcing solution.

In the past years, companies stipulated “efficiency, more productivity and savings” from their outsourcing services partners. However these end results are becoming practicable even with other companies. According to a recent blog post from Infinit-O, a boutique process outsourcing services provider, innovation should as well be applied if a company wants to be, or stay, ahead of its competitors. It also mentioned that outsourcing providers can play a huge role in innovation if just given a chance.

Innovation in its spirit is looking at things differently. It is basically a recreation and reinvention of what has existed. Outsourcing as supposed helps a company with the non-critical business operations, but with the services it gives, it can transform a business and can be a catalyst of innovation to the company and even to the customers.

With Infinit-O’s extensive experience of building relationships and providing services to clients, it says that innovation flourishes with the best business process outsourcing (BPO) relationships, and the best BPO relationships thrive in with the following good practices:

Related Article:

Paradigm Shift: Not Just Providers, but Partners in Innovation

Motivation

“When an outsourcing services provider is given the right kind of motivation, expectations aren’t just met, they are exceeded. “

BPO companies get highly motivated from the sense of partnership that the client can give. This can be simply shown by including them into sphere of decision-making and management most especially in the areas of solution deployment.

Collaboration and consultation

“Implementing outsourcing solutions according to the mindset that BPO companies are simply service providers does get the job done. But one way to get the most out of outsourcing is to consider your BPO provider as a strategic partner.”

Growth and transformation is also rooted with an active involvement of two parties. Outsourcing provider and the client should work hand in hand and do more collaboration. This can be seen effectively through team up in testing, solution development and even in giving timely feedback. Moreover, good collaboration is engagement of client with the ones handling their account. With this, there will be more interactions and regular discussion that can potentially draw out new ideas.

Trust

This is the most important because in the first place, trust has driven a company to choose its outsourcing service provider. However, when a certain outsourcing solution delivers the targeted result, it elevates trust.  So, trust grows and neither of the parties would want to break this. And as this grows, it simply results to exceeding expectations.

In the existence of these practices (motivation, collaboration, and trust), the symbiotic relationship between the company and the outsourcing service provider becomes beneficial and associative. A BPO firm or outsourcing service provider will not just become a “provider”, but will become a partner.

Related Article:

On the Spot: Outsourcing Best Practices

13 best practices for IT outsourcing

Outsourcing Best Practices that Make the Mark
Photo Attribution:

By Collaborationfoundation The 1 Second Film (Own work.) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons

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