Why keep responsibility for the Business Solutions?
One trend has dominated these last years: IT developments must be outsourced.
The main reason is the difficulty of building software in-house: too late, too expensive, too incomprehensible!
The reason given is more often than not "my job is automobiles, not IT" or "my job is insurance, not IT".
We could say "my job is automobiles, not human resources management" as well; so let's outsource human resources management...
Rather than incisive sentences, we need to reflect. There are 2 parts to IT activities:
- The Transformation: build the Model for the IT-Actors (what we call software)
- The Operations: operate this software on the IT-Actor platforms.
In view of the increasing role of IT-Actors, a growing proportion of the Enterprise Model finds itself in software. Should the Enterprise keep control of this software, or is it in its interest to outsource it?
The Enterprise uses Commodity Solutions, similar to those used by its competitors, and Business Solutions, which can give it a competitive advantage.
Commodity Solutions are computerized in the form of Software packages or standardized Cloud Service. We have given up the desire to control them: the consequences will not be too serious as these Solutions do not provide a competitive advantage.
On the other hand, the question arises for the Business Solutions.
One approach consists in defining the Business Model in-house, then outsourcing its translation into software externally. This translation is increasingly considered as a task that can be outsourced without any real value add: IT Transformers are often not highly regarded in the Enterprise.
There are 2 dangers with this approach:
- On one hand, if the Business Model is well built at the start, it is rarely updated later on, whereas the software undergoes successive modifications. Finally, only the IT Model represents the up-to-date reality of the Enterprise Model: when it outsources its IT Model, it becomes more difficult for the Enterprise to know precisely how it works.
- On the other hand, outsourcing will act as a break on the implementation of an Agile Approach in Enterprises: it is difficult to play the compromise game between functional Wishes and IT Possibilities if we outsource and fix the relations with IT by contract.
This is why a growing number of Enterprises today are looking to keep control of their Business Solutions. They feel that using a Software package for a Business Solution stops them from differentiating themselves from their competitors. They want to keep responsibility for their Business Model and, in particular, the associated software, to remain original.
To give an example, "Voyages SNCF" finally recently decided to do its developments in-house: impossible to coordinate the graphic artists, marketing, customer service and IT without having them work as a team inside the enterprise. Likewise, Axa-France decided to rebuild its teams of developers for the same reasons.
Can we subcontract IT developments?
Subcontracting IT developments is possible. But it is preferable that it proceeds by small, successive contracts, rather than a global contract that is supposed to contain everything: a subcontract Contract can be drawn up for each Version, after a sufficient number of iterations have been carried out, to select the requirements of the current Version.
It is desirable that each Enterprise keeps a core of recognized IT competences, controlling the overall design of the IT Model, otherwise, one day, it will find itself dependent on suppliers, who will have evolved the Solutions without the Enterprise keeping the knowledge of its Business Model.
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