2023 has ushered in a unique set of challenges compared to prior years as companies are continuing their paths towards digital transformation. There are huge skills gaps to fill, and embracing approaches such as composable ERP could add to the complexity.
Commissioned by Rimini Street, the Censuswide report, IT Leaders: The Future Outlook Report 2023, revealed that among more than one thousand CIOs and CTOs surveyed, 62% agree that digital transformation is a high priority for 2023, citing IT expenditure, the viability of a successful implementation of technology investments and hiring and retaining talent as their top three IT challenges.
Challenges ahead for leaders
Andrew Seow, GVP & regional GM for Southeast Asia & Greater China at Rimini Street, acknowledged that although IT budgets appear to be increasing more than decreasing, the degree that they are increasing is not significant given the inflationary pressures that exist.
"Justifying to the board that IT expenditure is delivering value to the business, ensuring the successful implementation of the organisation’s IT initiatives, preventing staff burnout and keeping up the morale continue to be the top three challenges faced by IT decision-makers in the region and across the globe," he opined.
He pointed out that the top three issues (identified in the report) reflect the current economic conditions, as understandably boards are going to scrutinise the value of IT investments more closely and want guarantees that any IT initiatives will be successfully implemented, while at the same time ensuring that “doing more with less” does not mean that staff are overloaded and in danger of burning out.
Key reasons for considering IT outsourcing
Seow pointed out that outsourcing has traditionally been viewed with a grain of salt because it focused on transactional aspects such as cost-cutting, which can have one-sided or commodity-oriented contracting models.
"Today’s strategic smart sourcing is focused on creating a much broader impact by not only cutting administrative and vendor costs, but also increasing innovation, and delivery of long-term transformation across multiple system functions along with collaborating on market growth strategies."
Andrew Seow
He noted that when organisations implement an outsourcing model for certain skill-critical services, such as ERP or cybersecurity, they get access to resources and talent with a greater depth of experience that will ultimately help them resolve both resource talent and bandwidth issues.
"Efficiency is another key reason why organisations today are becoming more receptive to outsourcing solutions," he opined.
According to Seow, when organisations have the option to outsource non-critical functions within their IT environment, they have the flexibility, and resources, to focus on strategic aspects of their business.
"In today’s climate, improving overall efficiency and speed has become crucial for organisations, and adopting an outsourcing model is taking a first step in that direction," he added.
Can outsourcing solve the security dilemma?
It is widely accepted that security professionals, especially in Asia, are expensive, difficult to find, and even more challenging to retain. Outsourcing the job of talent management seems a logical choice.
"Finding a partner to provide managed security solutions has quickly gained traction as a growth strategy for organisations globally," Seow claimed.
He added that the complexities of growing IT operations and corresponding security programs are simply too vast for many organisations to do successfully and thoroughly tackle independently.
"There just always seems to be a growing list of business needs, and not enough resources to accomplish those goals, thus turning to outsource solutions is seen as a necessity for many businesses today," he observed.
He claimed that due to the ever-growing costs of acquiring and retaining security personnel in this time of dire need, many organisations are finding substantial efficiencies, reducing the level of investment while achieving the same security and compliance objectives through the utilisation of Managed Security Service Providers (MSSPs).
Seow opined that the key to finding the right partner is ensuring that they have deep expertise in the services and solutions they are providing and that they have a clear understanding of the detailed differences between the platforms they are securing as one size does not fit all in enterprise software security.
"They should provide the business with a high level of value, consistently communicate in a manner that instils confidence to executive leadership and be transparent on what the business can expect in terms of the risk management level you will achieve for your investment dollar," he suggested.
As for the IT resources that stay on in the organisation, Seow pointed out that outsourcing empowers employees to focus on creative and strategic initiatives that are more meaningful to them and rely less on implicit knowledge and more on tacit knowledge.
"This directly impacts productivity and efficiency, something that employers are looking for in the current IT market," he opined.
The benefits of outsourcing
Seow opined that today’s CXOs must be empowered to support their strategic business initiatives in the middle of tightening IT spending, scrutiny of a successful implementation of technology investments and the perpetual challenge of hiring and retaining talent.
"End-to-end outsourcing solutions can reduce the total cost of ownership, enhance process and management efficiencies, reduce annual software support fees, and enable cost avoidance of unnecessary upgrades and migrations," he continued.
He pointed out that outsourcing eliminates the difficulty and challenge of recruiting, training and retaining ever-more-costly staff for hard-to-find enterprise software operational and support roles, thereby providing opportunities for client IT staff to focus on delivering innovation.
He claims that the business model can extend the life and value of existing software for up to an additional 15 years to ensure software investments can deliver full ROI and can continue to serve as the foundation for core business operations for many years.
He added that an outsourcing solution also provisions for cloud migration planning and project management to further reduce total operating costs by eliminating data centre hardware and staffing.
What to look for in an outsourcing solution
"Look out for an outsourcing solution that is well-reviewed and provides industry-leading service commitments," started Seow. He noted that a good program should offer a unified, unique service that also covers mission-critical support across multiple vendors and products.
"Instead of having multiple vendors for various solutions, organisations can look out for a one-stop solutions suite that covers mission-critical support, security, interoperability, observability, monitoring, and professional consultation services," he explained.
"An innovative outsourcing solution must help clients simplify the complexity of managing mission-critical enterprise software and shift operational and support responsibilities to the outsourced provider."
Andrew Seow
"It must extend the life and value of software, provide “turnkey” solutions with services available globally at a competitive, predictable, fixed and optimised cost, and enable clients to free up their budget to accelerate the delivery of new innovations to drive competitive advantage and growth, through road mapping and strategic assistance," he concluded.
