Transparency, trust and collaboration are key to a successful relationship in the outsourcing game – without this combination, any hope of achieving the goals of customer or vendor will be dashed, says Cindy von Pannier, Sales and Marketing Director of local software development company InfoWave. Outsourcing, particularly in IT, works towards a win-win situation for both parties involved. On a basic level, the customer requires a reliable, efficient and knowledgeable service that is likely to be ongoing, while the vendor seeks a well defined, long term service arrangement to provide expertise in the field in which it specialises.

Cindy von Pannier, however, maintains that successful outsourcing requires more than just the basic provision of service. “Outsourcing agreements usually start with fairly stringent and specific expectations of what is expected from the vendor. These bare bones are very limiting – they leave neither party with much scope for improvement, and give the vendor little chance to gauge how the customer’s business is developing.” There are various stages of development within an outsourcing agreement. The initial agreement stage outlines requirements and focuses on the specifics of targets and expectations. From there, the arrangement moves into a supplier relationship which, if successful, will grow into a partnership, with each party benefiting from the other’s success. “At this point, an advanced level of outsourcing can be achieved, where the vendor works closely with the customer at a strategic level, intimately involved with core aspects of management like budgeting and business processes. The customer becomes dependent on the service provider as an integral part of the business, enabling management to focus on the core aspects of the business knowing the back office is in capable hands,” says Cindy von Pannier.

For the vendor, the crucial key to application outsourcing is business knowledge. “It’s a common mistake many companies make: they want to outsource, but they’re not prepared to keep the vendor close to the business strategy. For the outsourcing model to work effectively, it’s vital for the vendor to become immersed in the company. The one enables the other – it’s a two-way partnership,” says Bruno Lionnet, Technical Director at InfoWave.

Illovo Sugar has outsourced its financial suite and all its applications to InfoWave for 10 years, ensuring all 17 sites in the six African countries in which it operates – South Africa, Swaziland, Mozambique, Zambia, Malawi, Tanzania – are reliably covered.

“Our outsourcing relationship is so successful that I have no IT team at all. We have 2 000 users of our applications and a staff of just two people – we are 100% outsourced,” says Dave Schaller, GM of Group IT at Illovo Sugar. Schaller puts the success of the partnership down to the complete understanding InfoWave has of Illovo’s business. “Over time we have cultivated a management relationship with InfoWave that has long moved past the contract stage. For an outsourcing agreement to work well, the relationship needs to be nurtured. Both partners have to shift away from a supplier-vendor perspective to one of mutual benefit in the long term,” says Dave Schaller. “When hiccups occur – and, naturally, they will – both parties need to work towards solving the issue together, rather than pointing fingers and finding blame.”

Outsourcing is particularly useful for organisations that are remotely situated and where IT resource retention is difficult to achieve. Sourcing well qualified IT people to work at the Tanganyika Plantation Company (TPC) Limited in Moshi, at the foot of Mount Kilimanjaro in northern Tanzania, is extremely difficult, and the costs of getting such people here are prohibitive, explains Anlo du Pisani, Finance Executive Officer at TPC. The company opted for remote location support in 2002 and is entirely reliant on it’s outsource partner, InfoWave, for provision of all software services. “For remote operations like ours there is really no better alternative than outsourcing our IT. We are assured of 24-hour support and constant uptime – a rare commodity in isolated regions of Africa. Outsourcing is also cost effective – to achieve the same level of service on site, we would have to employ dedicated hardware and software people. This way we save on resources,” says Anlo du Pisani.

On the global front South Africa has a considerable amount of untapped potential to offer IT outsourcing. “India, Korea and the East are over-subscribed and South Africa is well positioned not only from a cost perspective but from a knowledge and performance aspect,” believes Cindy von Pannier.“This country certainly has what it takes to compete internationally. The only constraint we face is our desperate skills shortage, which is already significantly limiting growth as an IT outsourcing contender in the global context.”

Contact

Cindy von Pannier, InfoWave, (031) 508 1800, cindy@infowave.co.za