The massive increase in data-handling in the instrumentation and control environment, together with so much integration with the higher logistical functions has placed manufacturing and processing industries in the position of having an increasing burden in the IT arena.
There is much buzz about IT outsourcing at the moment and it seems to be swinging back into vogue, after a previously fashionable period in which many companies got their fingers burned.
Outsourcing, like most things in life, brings with it certain pros and cons. Cons include the fact that you, as the customer, are handing over part of your business controls to another company. The perception that this allows room for elements of mismanagement to creep in, as well as the possibility of over-inflated costs, is a real one. Another reality is that your business becomes dependent, to a point, on another company.
On the other hand, says Streamworks' Outsource Manager, Terry Jensen: "Pros include the fact that your company is freed to concentrate on core business functions and simplify operations. It also means that the company is streamlined by not having to worry about employing full-time staff for certain functions. Streamworks believes the IT outsourcing net can be widened even further than its present paradigms."
Information Technology Services underpin traditional business functions found in the departments of Finance and Administration, Operations/Manufacturing, Marketing and Sales, Human Resources and Business Systems. Outsourcing these IT services is not a new concept. You could think of this existing situation as being the 'above-the-line' version of IT outsourcing - with the 'below-the-line' version about to make an entrance.
Jensen clarifies: "The 'below-the-line' part comes in when we think of the supporting business functions underpinning the supply chain between the business' suppliers and customers. As part of its business, Streamworks is involved in streamlining processes for clients involved in the manufacturing and distribution industries. In these fields, processes like procurement, plant maintenance, stores administration and process control are absolutely vital to the smooth running of a business supply chain."
Research indicates that most executives identify the greatest challenges facing them at the moment as being changing customer needs, e-commerce and supply chain integration.
Jensen continues: "These 'below-the-line' supporting business functions are at the heart of the supply chain process and hence the bedrock of the actual business itself. These, in essence, form industrial IT services as opposed to the traditional IT services that provide support to the traditional, head office side of the business. It is in the field of industrial IT services that Streamworks plans to offer its Professional Services Division."
The company's immediate focus is on providing professional services for the maintenance of industrial IT systems. This in turn works on a shifting scale, from simply managing and adding value to 3rd Party maintenance agreements, to looking after a portion of the industrial IT systems scope, to looking after the complete industrial IT systems scope. Future focus includes plans to set up centralised, remote monitoring and help desk facilities, as well as a spares holding service that will include the delivery of such spares as well as installation and support.
Streamworks is well aware of the fact that many people have tried out outsourcing before and been unhappy with the results. Jensen says: "We will be providing a customised individual IT service via a top-down approach. We are well aware of the importance of fully understanding a client's business strategy. Accordingly, the tender process is a detailed one in which customisation often takes place before the order is actually placed. Ultimately you need to create a win-win situation in which both Streamworks and our clients are happy."
Part of creating this win-win situation involves Streamworks usually using the co-sourcing principle, which is already tipped to become the next big trend in IT business management. A co-sourcing model is directly performance-related so that the outsourcing company is required to put its money where its mouth is. It requires senior management from both sides to be involved in the decision making processes - with shared responsibilities, but a simultaneous lack of red tape. It also sets the clients' minds at ease regarding the value for money they are getting. Says Jensen: "If you are working with a model in which Streamworks also gets profit for as long as the system is running, the clients realise that it's in our best interests as well as theirs to keep down-time to a minimum."
The last note alone speaks sound business sense. When both parties are involved in the profit share, the incentive to keep the system up and running is obviously of paramount importance to all. For companies wary of IT outsourcing agreements, the co-dependency model would definitely appear to be the IT service model of the future.
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