Johannesburg, 10 May 2006
As IT company arivia.kom nears the completion of its restructuring and realignment programme, the group has reviewed its outsourcing strategy.
COO Hugo Knoetze says the "old and traditional" way of outsourcing is a thing of the past, as the trend is to move towards the concept of managed services.
"The industry is moving away from IT outsourcing towards business process management," says Knoetze. He adds that this is one of the key elements in repositioning arivia to be a "world-class" provider of IT services.
He also observes that, with the managed services methodology, companies are increasingly talking about a move from input-based service level agreements (SLAs) to output-based SLAs between the customer and the service provider. However, Knoetze says, the market needs to migrate towards impact-based SLAs, as no company can deliver services 100% of the time.
"It needs to be established what the critical areas of a business are and what the critical periods are when services have to be up and running. A customer may not simply be happy with a service provider just meeting the conditions of an SLA.
"For example, an SLA may stipulate that a service must be available 98% of the time, but it is not sufficient if the 2% down time falls during a crucial period of the customer`s operation."
Held accountable
The shift to managed services with business process outsourcing for non-core functions, says Knoetze, is mainly driven by organisations that do not wish to be responsible for processes that are not part of their core business.
In addition, the managed services approach should be coupled with a model that would see the service provider become a single service aggregator to the client, he says. This means a service provider would be responsible for all aspects of service delivery, such as ICT services, maintenance and software licence fees.
"That way only one company is held accountable for providing the services and the client does not have to deal with more than one partner in case of a problem," he points out.
The single service aggregator model is something Knoetze is pushing hard to achieve at arivia, but he is adamant it is not about generating more revenue. Rather, he says, the company is seeking to clearly define its accountability and be in a position to manage any subcontractors that it may take on.
"This is purely a move to improve service delivery," Knoetze notes.
Escalation model
To successfully become a single service aggregator, an organisation has to establish a trust relationship with its clients, and employees need to be educated - from the top down - about the significant issues for each customer, he adds.
"An escalation model needs to be put in place and everyone involved must understand the urgency around various issues pertaining to a customer.
"Arivia has started implementing a managed services methodology, but it is not going to happen overnight. We have identified it as critical to service delivery and are currently getting the right processes in place. This is a high priority on my agenda," Knoetze notes.
But, he says, it is important to realise that an organisation will also have to implement behavioural changes and a total mind-shift to successfully implement a managed services model.
"The general uptake of managed services is visible out there, but it can fail if it is not driven by behavioural changes."
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