Is Outsourcing the Secret to Digital Transformation Success?

6/18/19 2:08 PM / by Marc Meyer

Marc Meyer

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It doesn’t take most businesses long to grasp “going digital” is easier said than done. Forward-thinking businesses understand that the path to becoming future-proof in today’s global business environment is paved with digital transformation. But it doesn’t take long for most organizations to grasp that “going digital” is easier said than done.

By now, most of us know that digital transformation is all about leveraging new technologies to improve every part of a business. Emerging innovations like artificial intelligence (AI), Robotics Process Automation (RPA), and the Internet of Things (IoT) are changing the way organizations operate and deliver value to their customers – driving process improvements that minimize costs while maximizing agility, productivity, and efficiency.

But even transformation projects that start with the best-laid plans can quickly spiral toward disaster if they aren’t implemented properly. Companies collectively waste a whopping $400 billion a year on misguided digital transformation efforts, according to research by Genpact. Yes, you read that right.

Digital transformation isn’t about sprinkling separate technologies around a business to target specific problems. Nor is it a light switch that you just have to flip the switch to enable. It’s about building an interconnected system that transforms the way work is done companywide. That can be a daunting task for many in-house IT organizations, whose limited resources are not only consumed by other work, but often lack all the experience or expertise that's needed to successfully complete such a complex undertaking.

 

Transformation is a multi-year journey and numerous bumps in the road are guaranteed to pop up along the way. Delivering a competitive advantage through disruptive technologies like RPA and AI is rarely seamless, and a depth of knowledge and experience is needed to address such potential challenges as data security and cyber risks, changing regulations, customer demands, and organizational resistance to change.

Digital transformation: the biggest challenge for change management

IT outsourcing is a proven success strategy for achieving superior business outcomes and the fastest time to market from digital transformation initiatives. As modern markets require businesses to innovate faster, a new breed of best-in-class IT outsourcing providers is emerging that no longer simply support non-core business services, but serve as strategic partners for their clients.

Digital transformation stands as the ultimate challenge for change management. Proper implementation by experienced personnel is critical to ensure that it unlocks the desired effectiveness and productivity gains while never failing to provide an exceptional customer experience.

Nearly 90 percent of companies contract a third-party solution provider to help with at least one component of their digital transformation, according to Accenture research. With that being said, combining internal resources with outsourced digital transformation services enables organizations to plug their capability gaps, accessing the comprehensive expertise that can guide them toward success. 

At the same time, many CIOs are attempting to free up their staff to focus on strategic activities by migrating applications to public cloud services, as well as outsourcing the operation and maintenance of computing, storage, and other capabilities. Companies are also accessing traditional IT outsourcing services at a greater rate, offloading tasks that don’t add value like back office work and managed services.

In fact, outsourcing now represents nearly 12 percent of the average total IT budget, a significant jump after hovering around 10 percent in recent years. The global IT outsourcing market is projected to surpass $481 billion by 2022, with an average growth rate of 6.2 percent a year.

7 compelling reasons to outsource digital transformation

  • Extra manpower. Large-scale digital transformations require immense manpower, which can be a challenge for IT departments already stretched thin by other mission-critical responsibilities. Outsourcing can minimize the burden on your in-house staff and provide unlimited access to a rich pool of world-class digital specialists.

  • Experience and expertise. Digital transformation demands holistic changes that require expertise in a wide array of domains and technologies. Best-in-class outsourcing providers offer hands-on resources with exhaustive experience in areas critical to digital transformation, from Big Data to enterprise mobility to RPA. Due to the low availability of in-house talent familiar with rolling out new technologies such as RPA, outsourcing can greatly improve the scale and speed of implementation at a company.

  • Mitigate risk. While the digital transformation process can feel daunting to business leaders attempting it for the first time, it isn't the first rodeo for a skilled IT outsourcing provider. They understand the challenges that await and know how to overcome them. They know what steps you need to take - and when you need to take them - to achieve success. They are even familiar with many industry-specific issues that can arise. Outsourcing the process to a provider who already knows the best way to achieve your business goals not only saves time and money, but reduces risk from missteps or unforeseen complications along the way.

  • Additional capabilities. It’s unnecessary – and cost-prohibitive – for companies to add all the capabilities they need for their digital transformation journey. Especially since some of them are only required a portion of the time. Tapping into the tools already available from IT outsourcing providers can help companies fill technology gaps and add capabilities they lack.

  • Flexibility and scalability. Partnering with IT outsourcing providers gives you the ability to control costs by scaling the size of your digital transformation team up and down according to business demand. Engage resources with particular skills for as long as you need them, or reap the benefits of a dedicated development team working as an extension of your in-house staff during the most intense parts of the transformation.

  • Tap into Data Science as a Service. An important outcome of digital transformation is the ability to leverage Big Data and business intelligence (BI) opportunities. Drawing on data science can help companies deliver personalized user experiences, innovate new products, and spot new business trends and markets.

But the cost and time demands of building an in-house data analytics center can quickly add up. You’re also most likely to pay big bucks for in-demand employees with expert data science skills. Outsourcing providers with data science expertise can help business leaders make data-driven decisions, creating custom data-processing models and turning aggregated data into insights, graphics, and visuals.

  • Better equipment and security. Many companies rely on legacy equipment that struggles to support new technologies. Outsourcing enables organizations to take advantage of high-quality, up-to-date software and equipment without having to make a significant upfront capital investment. Skilled outsourcing providers also already have best security practices in place to protect clients from cybercrime.

Is your business serious about digital transformation?

“Going digital” is no longer a choice for companies who want to become long-term market leaders. But emerging technologies change so rapidly that most internal IT teams lack the technical capabilities or business knowledge to determine the best solutions for their organization. Inexperienced personnel, poor data-gathering systems, and unclear objectives are the most common reasons digital transformations fail. Leveraging IT outsourcing is essential for companies that are serious about transforming their business with emerging technologies, providing access to cutting-edge talent and new ways of thinking that can map the right strategy for success.

About Auxis

At Auxis, we support organizations through the entire digital transformation journey, starting as your implementation consultant, all the way to managing and operating RPA and other technologies for you under our Business Process Outsourcing model.

Do we have a track record of success? You bet we do. Go here to read some of our case studies. If you’re ready to start your RPA journey, click here and schedule your consultation today!

Marc Meyer

Written by

Marc Meyer

Senior Content Strategist