IT Services, Thought Leaders

How a Strategic IT Partnership Differs From Traditional IT Outsourcing

February 27, 2020

by Lukasz Karwacki

Co-Founder and CEO, Sunscrapers

This article presents the topic of IT outsourcing from a new angle, focusing on the move away from traditional outsourcing models towards more strategic IT partnerships. It discusses the key benefits of such an approach together with a handful of tips for making such strategic technology alliances work.

IT outsourcing was born in the late 1980s when Eastman Kodak made the bold business decision to outsource the design, development, and management of a new data processing center to IBM. Fast forward to the early 2000s, and you'll see countless businesses delegating IT functions to third parties. 

Traditionally, outsourcing was considered a low-cost alternative to hiring internal staff. Organizations often chose vendors based on their bottom-line cost rather than the value of provided services.

But during the last few years, this has changed dramatically.

More than ten years of business experience has taught me that outsourcing can be more than just delegating problems to an anonymous team on the other side of the globe. When done right, it can become a real strategic partnership where 2 companies enter into a symbiotic relationship where they support each other's growth.

3 Ways Strategic IT Partnerships Improve on Traditional IT Outsourcing

  1. Strategic IT partnerships leverage business and technical expertise
  2. Strategic IT partnerships offer services that can scale with growth
  3. Strategic IT partnerships are fulling integrated into the business

Strategic IT Partnerships Leverage Business and Technical Expertise

The primary reasons why companies all over the world outsource IT have remained the same since Eastman Kodak's decision in the 1980s. 

It’s about cutting costs by reducing the number of internal staff and infrastructure along with the overhead that comes with them. Organizations would choose low-cost providers to fulfill specific technology needs. 

But the problem with this low-cost approach is that such providers tend to specialize in specific areas and can't provide anything beyond staff augmentation services. That's because they share the low-cost outsourcing mindset and fail to consider expanding their service offerings.

However, outsourcing is now transforming from low-cost staff augmentation to a valuable strategic alliance.

Outsourcing IT functions is no longer a simple cost reduction measure. Instead, it's an opportunity to partner with a team of experts who bring a unique mix of business and technology expertise on board.

Software development agencies like Sunscrapers can quickly scale services to help companies meet the rapidly changing business demands, giving them an instant operational boost and serious competitive advantage. Outsourcing allows businesses to stay nimble and focus on core competencies.

In the most rewarding scenario, such collaboration becomes a real strategic partnership. 

Strategic IT Partnerships Offer Services That Can Scale With the Growth

Companies today can find providers who are able to add value to a business that goes way beyond cost-cutting. 

When teaming up with a strategic IT partner, companies get the traditional benefits of outsourcing together with the potential to take advantage of their partner's expertise for guidance as the business grows. 

IT partners offer multi-faceted services that handle all a wide range of IT needs, starting from software development services (e.g., business, ERP, BI web, mobile applications) to consulting services (e.g., strategic IT planning, on-demand CTO services, ERP implementation).

You can outline the benefits of strategic IT partnerships like so:

  • All IT functions outsourced to one company
  • No need to juggle different relationships with providers
  • A consistent quality of delivered services
  • Sense of ownership
  • Expertise that powers business growth

Benefits of strategic IT partnerships

By keeping all these functions under the roof of a single technology partner, organizations don't have to juggle different relationships and are guaranteed a constant quality of delivered services.

In such a symbiotic relationship, both the company and its IT partner can focus on what they do best.

Strategic IT Partnerships Are Fully Integrated Into the Business

So, what can you expect from your IT partner? The ideal strategic IT partnership is well-integrated into your business, which allows for a more nuanced support system. To lead a navigate a successful partnership, follow these tips.

Understand the Objectives and Commit to the Output

An experienced provider will compose teams with the deliverable in mind, not the headcount. In a strategic partnership, the partner shares the responsibility of the development process, as well as its outcome and its implications for the company's business objectives. 

Both sides are committed, understand their roles and responsibilities, enjoy the satisfaction from work, and celebrate the project's success together.

Communicate Openly About Issues

A low-cost provider might be hesitant to deliver bad news. A real partner always notifies the company as quickly as possible to mitigate the risks and come up with a solution. 

If something happens that delays a deliverable or changes a requirement, a tech partner is going to address it right away instead of waiting for a formal review meeting. Open and frequent communication between the 2 companies that are part of a strategic alliance helps to make informed decisions fast.

Follow a Well-Designed Development Process

The agile software development methodology is an excellent method for addressing requirement changes that may happen once the project is under development. Building an iterative development process with frequent reviews and outputs is critical to keeping the project on track. 

For example, we combine agile with continuous integration/continuous development (CI/CD) and test automation processes to ensure regular and fast-release cycles.

Agile methodology

This is done in 2-week sprints to ensure that everything remains on track at set intervals. 

Think in the Long-Term

In my experience, long-term partnerships usually grow out of small projects that demonstrate the quality and performance of outsourcing partners. A successful project may lead to ongoing development projects and support in other areas as the company grows. That's how we launched our longest collaborations. 

Companies need a predictable quality software development – and that's something only a strategic IT partnership can deliver.

Take IT Outsourcing to the Next Level

Hiring IT experts and building in-house teams is a huge burden that leads companies to outsource software development to cut costs and speed up their time to market. But by doing so, these companies experience serious business risks that focus on the quality and timeliness of delivery.

As the CEO of a software development company that provides skills and expertise to clients all around the world, I believe that a strategic IT partnership model is what IT outsourcing will look like in the near future.

It’s simple: businesses looking to avoid the common pitfalls and compromises of traditional outsourcing should consider teaming up with an IT partner. Only a close tech partnership can help companies meet the demands of today's fast-paced, increasingly competitive market.

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