Outsourcing Plays A Key Role In Providing Total Solutions

The delivery of information technology services has changed during the last two decades. Twenty years ago, hardware vendors sold hardware, and software vendors sold software. Each provided its own intimidating reader manuals that spelled out the answers for any client who had the time and the patience to read them. Then came the 1980s and 1990s where high tech vendors added detailed training and consulting to their company's product offerings. However, as the 20th century comes to a close and the 21st century begins, a new trend is evolving.

Market Demands A Total Information Technology Solution
It's a buyer's market, and information technology (IT) customers expect more from their vendors. They are looking for quick and easy answers in a one-stop shopping environment with no-assembly-required mentality. Hardware and software companies that spent the last decade becoming highly-specialized and building their expertise in the development of products possibly had tunnel vision.

Instead, IT customers want to work with others, who can see the big picture and provide total solutions. This mindset paved the way for the formation of new alliances between some IT vendors for the creation of combined product and service offerings. One of the driving forces behind the creation of these new vendor alliances are today's rapid technological advancements. Vendor specialization is required to take advantage of new technologies and to be competitive in the marketplace.

Vendors Team Up To Meet End Users' Multiple Technology Needs
Additionally, when companies realize that their systems are becoming obsolete and purchase new ones, they are faced with the dilemma of determining how to continue operating the old systems, while simultaneously implementing the multiple technologies. There's really no simple solution other than some form of outside help.

Selectively outsourcing training or other tasks can free up the dedicated staff's time for a new system's implementation. When undergoing conversions, many companies are turning to trusted hardware, software, or services vendors to provide a menu of options ranging from the basic system components all the way to complete outsourcing of specific functions.

Outsourcing Managed Operations Or Data Center Needs
The most recent addition to the vendor offerings is managed operations or data center service. This option offers a client a solution to issues such as staffing problems, system moves, acquisitions or platform changes. Since most hardware, software and services vendors do not have a world-class data center, they partner with someone who specializes in this service.

The data service vendors provide floorspace and environmentals for the client's processing and offer expertise in the basic operations and technical support of the mainstream platforms used today, including UNIX, AS/4000 and MVS systems. In short, they enable other vendors to offer the end user increased operational efficiency in addition to desirable cost savings.

Can The End User Devote All The Resources Necessary To Obtain A Total Solution?
Consider the following creative solution offered by a software vendor aligned with a managed operations provider. A company wants to implement a new software package, but due to high development costs, the software vendor requires full payment up front. The client doesn't have the cash flow to pay in full for the software, much less the hardware and additional staff resources required to implement the new software.

Outsourcing Provides The Solution To The End Users' Needs
The software vendor solved this problem by offering a solution that contained the new software, hardware and data center service for a monthly free. In this case, the managed operations provider pays the software vendor for the package and converts the cost of software, hardware, facilities and operational resources into a monthly fee that is less than the client could have paid for. This arrangement leaves the mission-critical user and application support function for the client to handle internally or with another specialist firm.

The Future Of Outsourcing: Services Offered Remotely
What's the next wave? Payment for use. With new high-speed, low-cost communications options, the system location is virtually a non-issue. Managed operations vendors are assisting other technology firms in combining products and services so that the end user can be offered the option to plug in via the Internet or other communications means to use the systems remotely.

There are many different types of vendor alliances that are being formed, from very loosely structured, informal ones to complex, multi-partner ventures. The key is to assemble alliances that capitalize on each partner's strengths and minimize weaknesses. By combining forces, the end result can be synergism at its best with the ultimate winner being the client who receives a quality solution at a lower cost than could be done internally.

Paul Harwood is vice president of business development for AmQUEST, Inc., an Atlanta-based managed operations provider. AmQUEST provides data center services for clients of its alliance partners such as IBM, Sun Data, and Omnitec Services. He can be reached at (404) 264-5211 or by e-mail at pharwood@amquest.com.