The Dangers of Unmanaged Change
05/30/2008
The Dangers of Unmanaged Change
Much work has gone into the development and release of the state’s RFPs for infrastructure and managed network services. A team of close to 100 agency and GTA employees worked for several months to ensure that the documents addressed the business needs of each agency and the state. After we issued the RFPs last month, I only half-jokingly remarked that it is time for the real work to begin.
In fact, even after we evaluate solutions, choose the right service providers and sign contracts, the real work will have only begun. Successfully transforming the state’s IT enterprise will require effective management led by a service management organization (SMO) that GTA is designing, constant communications with our agency partners, commitment to the solution and a long-term change management strategy. After all, we will not be successful unless we develop a solution that will withstand the test of time.
We have been candid about the challenges we face in our transformational initiative and we are constantly working to educate stakeholders on our process and what they should expect. A report released last month by Technology Partners International (TPI) gives perspective to the issues we must manage to achieve our goal of developing a sustainable solution.
In particular, this report warns against the dangers of unmanaged change which “causes a severe performance gap during the outsourcing implementation and results in expected performance not being reached.” The report, The Top 10 Problems With Outsourcing Implementations (And How to Overcome Them), is the result of interviews with providers and buyers of outsourced services as well as knowledge gained from the firm’s 350+ advisors with vast outsourcing experience.
Common pitfalls to successful outsourcing
High on the list of common pitfalls is a lack of understanding of post-contract processes and a lack of support from client leaders receiving services. According to the report, clients and service providers are often unprepared to work with each other after the contract is signed, resulting in services not being performed and implementation activities being delayed. In addition, leaders who will receive services may be unprepared for changes. Their resistance can hinder the success of the implementation.
Another problem on TPI’s list: The customer does not put a team in place to manage the new service provider or the team is too small or lacks required skills. Without the right team with the right experience and training to manage the outsourcing implementation and operations, important issues go unaddressed.
The final pitfall noted by TPI is one of the most troubling: Changes don’t last. Organizations tend to revert to old ways if they lose focus on communication, governance and processes.
These problems, along with the others outlined in the report, can have a devastating business impact: “Our findings indicate that unmanaged changes are the biggest problems clients face in outsourcing implementations—not issues related to specific contract terms, pricing or technology.”
What we are doing to ensure success
While the report underscores the need for change management and governance, it also offers suggestions for achieving success:
- Client and service provider leaders must be clear about the future state and how to get there.
- Client and service provider staff must have the right skills, knowledge and capacity.
- The client must have policies and programs that support and enable change.
- The outsourcing governance model must be in place and understood.
- All involved must understand, accept and commit to the new model.
Each suggestion involves communication, which has been a cornerstone of GAIT 2010. We have involved agencies from the start, and we communicate regularly to make sure that agency leaders have the latest information about the project and the changes it will bring to the state’s IT enterprise. At every step of the way, we are ensuring that agency business needs are recognized and addressed.
We know that effective management of the service provider is critical and requires extensive preparation. We are building a service management organization (SMO) to ensure that the state receives quality, cost effective and reliable services. It will be in place when the contract is signed, with experienced leadership and skilled staff.
Although we are doing all we can to be prepared, implementation will not mean flipping a switch. It will require ongoing dialogue with providers and agencies as we adopt new methodologies for service levels and pricing and new processes for billing, budgeting and procurement. GAIT 2010 is a complete transformation; we cannot afford to revert to old ways.
As the TPI report states, “The benefits of outsourcing come through the successful introduction and sustainment of change — a continuous commitment rather than a one-time event.”
The technology transformation underway in