Several weeks ago, I took my brand new smart phone to the service center for repair. Even though it’s one of the most advanced and sought after handsets, its performance was horrible. After hours of testing, the technician said the root of the performance problem was that too much complexity and too many features were built into the phone. At that moment I realized that while I had paid a fortune for the phone, I wasn’t aware of 50 percent of its features, 30 percent of its capabilities were useless to me and the 15 percent I really wanted didn’t work! Perhaps I should have bought a simple phone that worked, had the features I needed and was easier to manage.
In a déjà vu type of moment, a week later I attended two large IT service providers’ briefings where the focus was on their ITO transformation strategy. They spoke about various aspects of the IT landscape, yet I couldn’t escape the consistent theme in their discussions… simplicity.
For years the ITO industry has allowed complexity to breed complexity. Many CIOs believed – and many still do – that their businesses were so unique that they needed custom applications and systems. And the outsourcing service provider community played to this belief in order to seal large, complex, customized transformation deals when the reality is that high level of customization wasn’t, and isn’t, necessarily required. Moreover, with highly complex and customized outsourced IT environments, project management, vendor management, execution risks and other issues related to business applications support become highly challenging and extremely costly to develop and maintain.
However, the recession and continuous pressure on internal IT teams to show value are now forcing many CIOs to pick and choose the services they want from their outsourcing provider. In their smart unwillingness to tinker too much with their current IT systems and environments, they are instead increasingly asking for plug and play services, especially those where they can pay by the drink. Moreover, the general acceptance of the fundamental principles of cloud computing, especially the SaaS model, are also impacting the approach of CIOs towards consumption of simpler, off the shelf IT assets.
Granted, outsourcing providers will need to develop appealing solutions that are modular, standardized and consumed on a pay per use basis. But it is high time for both buyers and providers to open up, see beyond the traditional ways of sourcing IT systems and leverage the power of modularization and productization of services. While this will require a great deal of unlearning, relearning and resetting of current skill sets, it is critical if buyers and providers want to adopt the emerging new normal in IT consumption.
