That is the consensus that participants in a panel discussion at the CNETAsia Gartner Summit 2004 reached on the topic of outsourcing.
John Dahlberg, executive vice-president and head of group operations and technology, OCBC Bank, warned that blindly dumping problem issues to an outsourcing service provider never solves the problem.
"Never outsource something you don't understand," he cautioned.
But when the fit is right, outsourcing can be a "brilliant strategy", he said, because it can dramatically cut cost, improve resource augmentation, and even to open up the possibility of the company becoming a service provider to service providers.
So how does one know when the fit and timing for outsourcing is right? Ng Yoke Weng, group chief information officer (CIO) of Singapore-owned carrier SingTel, has the answers. He noted that the decision to in-source or outsource is dependent on several factors, one of which hinges on whether the service provider or vendor is willing to assume a role involving creativity and innovation.
Know thyself
The three key panelists at the discussion, which also included Teo Chin Seng, CIO of Singapore Technologies Engineering, concurred that it is vital for a company to "know itself" before deciding if or what to outsource.
Organisations must analyse what they have, as well as what they can do, before they even start considering outsourcing possibilities.
The panelists also agreed that finding a method of measurement for internal operations and partners will be vital. Another must do: identify the idiosyncrasies of your partners' processes.
Self-awareness is also an imperative for service providers. Ng said that service providers should know what they are selling as "many of them over-promise". Similarly, Dahlberg suggested that service providers decline projects they know they cannot handle.
At an operations level, Teo advised vendors to train people on the ground: "They must understand their own company and product, as well as the customer's...they must work to solve problems with the customer."
And so it came to the most important question of all: who gets the outsourcing job? Key considerations, concluded the panelists, must include geographical coverage, experience and capability.
Carolyn Oei is a freelance IT journalist.
