In Luxembourg, as elsewhere, the IT sector has established itself as the undisputed forerunner of service outsourcing. This model, born of the need to optimise costs and gain access to a variety of skills, has become an essential lever for meeting the demands of rapid innovation. Whether it's software development, infrastructure management or technical support, specialist IT outsourcing providers remain at the forefront of trends, constantly redefining the contours of their collaboration with their customers.
Today, as businesses seek to balance decentralisation and control, the IT sector continues to demonstrate its leadership in this outsourced services revolution, while inspiring others to simplify the life of the entrepreneur.
Flexible, cost-effective solution
For SMEs, which often have limited resources, outsourcing can represent a real financial boon. Instead of recruiting and training full-time staff, they can access cutting-edge skills on a one-off or regular basis, depending on their needs. "When we talk about outsourcing, the first thing we think about is cutting costs, and that is indeed a key factor," says David Barbaro, sales deputy director managed services & outsourcing at Proximus NXT in Luxembourg.
"Calling on an external service provider allows us to take advantage of shared, tried-and-tested solutions that meet the latest market standards,” Barbaro states. “Apart from the price, one of the main advantages of outsourcing is that you gain access to expertise that you don't have the resources to develop in-house, to multidisciplinary skills that you can call on to support the development of your infrastructure or your business projects. In this context, it's very important to call on a partner who has the critical mass to cover all your needs".
Outsourcing makes it possible to reduce fixed costs (salaries, benefits, etc.) by transforming them into variable costs. This flexibility is particularly valuable in a context where markets are changing rapidly and adaptability is becoming a major asset. "Customers no longer have to invest in infrastructure and tools that they own. They pay as they go, on the basis of a contract that includes a set of predefined services and access to a catalogue of on-demand solutions. The resources made available to them can therefore vary according to the projects they want to carry out,” Barbaro comments.
Just because you outsource doesn't mean you lose service quality.
This gives SME managers great visibility over their budget, as well as advice and tools for forecasting future expenditure. Thanks to outsourcing, SMEs can add stability to their IT infrastructure and guarantee its security, at a time when cyber-attacks are on the increase and the resilience of information systems is at the heart of discussions, particularly around the new and directives.
“Last but not least, we have access to innovation,” Barbaro states. “Our customers are sensitive to new technologies and innovation is now an integral part of our contracts. Artificial intelligence, [internet of things], machine learning and data management are all very topical issues, and we have a dedicated unit to deal with them. Once or twice a year, we plan discussions on new market trends. Through use cases, we try to make the link with the customer's expectations to imagine or define together a new strategic roadmap, based on our expertise and our research.”
By entrusting these missions to external experts, companies gain in efficiency and quality, while freeing up time to concentrate on their core business.
From consultancy to operations
To achieve its objective, an outsourcing operation involves several phases, the first of which is to spend time defining the customer's precise needs. "Upstream, the external service provider must be able to support the SME, which does not necessarily have a precise idea of all the advantages and solutions from which it can benefit," explains Barbaro. "For example, we have a 'cloud adoption' service to guide customers, who sometimes find it difficult to understand the different advantages of public, private, hybrid or sovereign clouds. Generally speaking, the aim is to achieve a cross between the company's strategic objectives and the IT tools it needs to achieve them. Before thinking about the contract, we will also carry out a due diligence, to take a snapshot of the initial situation, with the aim of preparing the upcoming transition phase as well as possible. Through this exercise, we will define an ideal target situation, with all the advantages it represents in terms of commitment, services and solutions."
Resistance to change exists everywhere. Outsourcing can be a good vehicle for getting things moving, initiating change with the support of an external service provider who brings a neutral viewpoint and can provide the right skills and solutions.
Once the framework has been defined, the IT service provider delivers the defined services, including hardware, network, storage, security and everything else that makes up IT, starting with the cloud. "Beyond the pure infrastructure, we can also take care of the user workstation, what we call workplace management, right through to the service desk, which offers support to end users, to manage requests and any technical incidents," says Barbaro. "For smaller structures, we have developed a basic service, in the form of an easy-to-use package to cover the primary needs of any SME."
In many cases, the IT service provider becomes a genuine business partner for its customer. "When the strategic and operational levels come together, we can build a real relationship of trust with our customer. In structures of a certain size, we have privileged and regular contact with the internal teams. We have access to their portfolio of projects, so we can make the link with the needs to be implemented, anticipate them and draw up a budget for the coming year, based on the projects to be carried out. This exchange at the business level makes our work more meaningful.”
Maintaining control over the service provider
For an outsourcing operation to go as smoothly as possible, the company must be able to control its IT partner and retain control over its business. "To achieve this, the first step is to draw up a clear contract, with measurable obligations and clearly defined roles and responsibilities," stresses Barbaro. "You also need to take the time to negotiate the contract, to clarify the commitments and obligations on both sides. You also need to include a reversibility clause. If the customer is not satisfied with its service provider, or if it changes its strategy or organisation, it must be able to withdraw, either to reintegrate part of the services internally or to entrust the task to another service provider, without jeopardising the continuity of its business".
The other essential point concerns governance, the way in which the two parties involved will manage their relationship throughout the life of the contract. "Our approach is to put in place a very precise governance model, with key contacts at both strategic and operational levels,” he says. “For example, we appoint a service delivery manager (SDM) to manage operations, a security service manager (SSM) for security-related aspects, and a design authority (DA), an expert who has a global view of the architecture and can support the customer in its business projects... Each of these functions must have an equivalent on the customer's side in order to establish effective and transparent communication. The quality of communication is central to the success of an outsourcing project.”
Supporting and facilitating change
Over and above the contract and governance, the company that uses outsourcing must be able to control its service provider on the basis of precise reports covering the entire scope of the outsourced service. "We have an obligation to deliver results, and penalties may be due if commitments are not met," says Barbaro. "So we have to draw up reports based on pre-defined performance indicators and monitor them closely. Finally, always with the idea of maintaining control, the customer involved in a change process must ensure that they have a clear view of the various stages to come. The change needs to be qualified, its impact analysed before it is carried out according to the rules of the trade, according to a well-defined schedule, right up to the final report".
For an SME, outsourcing solutions can sometimes seem disproportionate to the needs and resources available. "Today, every company, whatever its size, has to take care of its day-to-day management, using an ERP system to optimise internal resources and a CRM system to manage relations and communications with its end customers," observes Barbaro. All entrepreneurs must also ensure that their business, organisation, tools and processes evolve to meet new market expectations.
"For an SME, this approach is sometimes complicated to implement. Resistance to change exists everywhere," he continues. "That's why outsourcing can be a good vehicle for moving things forward, initiating change with the support of an external service provider who brings a neutral viewpoint and can provide the right skills and solutions. With this in mind, we offer a few days' support to give customers access to cross-disciplinary expertise to help them make the right choice. This discussion always starts from the strategic level, the organisation and the processes in place, before considering the technical solutions that we could implement".
This article was written for the supplement supplement to the published on 11 December. The content is produced exclusively for the magazine. It is published on the website to contribute to the complete Paperjam archive.
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