Monday, June 20, 2005

Intelligent Solutions: Why outsourcing makes business sense

Convergence of technologies such as telecommunication, information technology and media has redrawn the landscape of business, where geographical boundaries get blurred and electronic commerce and enterprise systems completely rule the roost. Such a scenario has propelled the demand for off- the –shelf software products and qualified software professionals to handle these functions. Consequently, demand has exceeded supply, and dearth of professionals has increased hiring costs, longer product development cycle and longer time to market.

Most likely, you won’t find required software products and qualified professionals in-house even within your geographical boundary. Outsourcing could be an apt alternative to solve many of your business problems.
Unavoidable reasons why outsourcing makes business sense

There are certain unavoidable reasons that make you realize that you will gain eventually if you use outsourcing as an intrinsic part of your business strategy. You can avail following advantages, if you opt for outsourcing:

Lessen overheads, free up resources
Minimize capital expenditure
Enhance efficiency
Free from non-core functions
Access to pool of specialized skills
Save on manpower and training costs
Trim down operating costs
Speed up development cycle
Build long-term, strategic relationships with world-class service providers
Boost tactical and strategic advantages
Focus on strategic thinking, process reengineering and managing trading partner relationships
Share your risks
Offer the best quality services, products and people
Be reliable and innovative
Provide value-added services
Perk up customer satisfaction
Harness the provider's extensive investments in technology, methodologies and people
Exploit the provider's expertise in solving problems with similar requirements.
Focus sparse resources on time-critical projects
Acquire required project management and implementation consulting expertise, along with access to best practices and proven methodologies
Minimize the risk of technological obsolescence
Extend the reach to more trading partners quickly and efficiently
Ease the overall IT management risk while retaining control of strategic decision making.

Outsourcing is, now, an established management tool for redefining and rejuvenating the business that induces today’s executives to reorient their traditional firm towards a more flexible structure crystallizing around core competencies and building long term strategic outside relationship.

Tuesday, June 14, 2005

Intelligent Solutions: Essentialities of eBusiness

eBusiness has seen many changes and ups and downs since its inception. Many companies were beaten by the eBusiness bug during the dotcom euphoria, caught off-guard and faltered without making a fuss, as most of them couldn’t understand the nuances, tools and technologies of electronic business, online business or affably known as eBusiness, which has truly been impregnated with unseen and untapped potential.

What was emerged from the dotcom bubble is the realization that mere a mindless entry into eBusiness or eCommerce or for that matter having an online presence will not give any competitive edge. To be successful and to have cutting-edge over competitors, an eBusiness initiative needs to have synergies with overall business strategy of the organization and has to have distinct set of objectives as a big differentiator or driving force.

This article discusses essentialities an organization needs to be fulfilled in order to stay competitive in the realm of eBusiness.

Essentiality 1: Identify eBusiness strategy

It is essential to identify and define eBusiness strategy, which should be nothing but an integrated part of your overall business strategy. This identification of strategy will lead to a set of well-defined initiatives each with its own objectives and desired outputs. In addition, you need to have parameters to evaluate the success of each and every initiative that eventually have impact on your eBusiness strategy.

Essentiality 2: Prioritize eBusiness initiatives

Prioritizing eBusiness initiative is another essentiality otherwise you could end up with several competing initiatives each with its set of proponents. Metrics to prioritize eBusiness initiatives include:
· Business impact
· Business urgency
· Technical complexity
· Effort involved
· Change involved
· Organizational readiness, etc.

In a collaborative discussion between you and IT professionals, eBusiness initiatives are prioritized to work upon.

Essentiality 3: Define Success Measurement metrics

Your eBusiness initiative should have a set of measurement metrics that help you define success. Some of the important measurement metrics are:
· Is the aim of eBusiness initiative to curb increasing cost?
· Is it to improve productivity?
· Is it to provide your customers with upto -date information?

These measurement metrics to establish the success of eBusiness initiatives should be defined in such a manner to reflect impact on overall objectives. Take the example of a tourism company that wanted to have a Web site based on state-of-the-art technology platform. Its Web site provided tourists with the option to book tickets, accommodation and all online. Initially, the tourist firm used to garner a meager 2% of its overall revenue through online presence, and remaining 98% was coming from other channels such as call center, travel agents, business affiliates, etc. The re-designed site gave it a scalable platform and allowed it to drive business, using multiple mechanisms marketing, personalization, improved usability, enhanced functionality etc. Today, around 15% of its revenue is generated through the online presence. Such metrics enable you to monitor consistently your ROI and the health of your overall eBusiness initiative.

Essentiality 4: Structure the Organization as per eBusiness Initiative

Your eBusiness initiative needs to have adequate representation from both the business and the IT team, so that they can work as a team to reach the overall goals. There should be a clear work-flow structure that is able to look across the different initiatives, monitor their health, resolve conflicts, and provide the required funding and resources.

Essentiality 5: Implement the Solution

Your set of eBusiness initiatives needs to be very conducive towards an iterative implementation model. Once business requirements have been understood, an architecture definition phase should be undertaken to define the base technologies and platform. It is also an appropriate time to decide between an out-of-the-box solution or a custom-development based on core technologies.

Further, your implementation model should also take care of the user experience, as many of the end users may not have had prior training on using Web-based applications, and hence usability of the application becomes key determinant to have online success. Once the architecture and user experience model is in place, the application can be further evolved as per business requirements, technical design and implementation.

Essentiality 6: Consistent Monitoring

A consistent monitoring of the key metrics, making changes as per the business needs and day-to-day maintenance are required to keep the eBusiness initiative fresh and in tandem with changing business demands.

eBusiness that makes Sense

Once all the stated essentialities are fulfilled, an organization finally embarks on eBusiness initiatives that make sense for its particular situation. eBusiness needs to make business sense and should be judged by the same set of metrics and ROI calculations which are industry standard and widely accepted across the organizations. Technology will keep on evolving and each organization will decide its own platform depending on the perceived benefit and the scalability of the technology.