When outsourcing was first proposed as a viable business option a few years ago, it was confined to the world of information technology alone. Businesses turned to IT outsourcing to reduce operating costs, focus on their core competence and to accelerate business processes. As it produced the desired results in IT, other departments such as human resources, finance and even information began flirting with the idea.

In the light of changing technological, information and commercial environments, all sectors focused on maintaining their market share. Outsourcing, offshoring and shared services looked promising for areas such as learning, research, information management and data mining to help companies have a competitive edge.

Today specific offshore models such as Knowledge Process Outsourcing (KPO), content transformation and even an ‘offshore centre for excellence’ help avoid process repetition and streamline business prospects. KPO gives information professionals an ability to outsource a wide range of non-core but knowledge-based tasks and free up internal resources/personnel to focus on strategic areas. It has helped eliminate waste and standardise and automate business, insist experts.

With the current economic downturn and its impact on outsourcing and shared services, experts predict such arrangements are likely to trickle further down the information spine.

Organisations use specialist information services for searching, extracting metadata and data mining to help with policy making. They provide access to critical skills and experience, help implement industry best practices and improve performance.

Having made steady inroads in the information sector, how can institutions and professionals adapt and equip themselves for newer trends? Professionals should consider key company objectives and then analyse and review the data to achieve them, experts say. Fons Kuijpers, head of IT management and operations practice, PA Consulting Group said: “While outsourcing reduces operating costs, the biggest challenge is that all professionals in different companies receive the same data from outsourced service providers. How professionals use this information is important.”

Nick Kingsbury, director at Objective Corporation, said the role of the professional within an organisation that adopted the offshore business model remains challenged. “His/her role has to morph more into the person who understands the options and can advise the business manager on credible alternatives.”

Besides, off-shoring requires offshore providers to have deep technical capability in this new technology, subject matter expertise as well as process experience to automate “transformation” wherever possible.

“As multi-media content and a wide variety of information delivery platforms become widely available, publishing companies will need to transform existing and new content to take advantage of this new technology”, said Tom Lesica, chief executive, global shared services, at Wolters Kluwer.

Not just money, honey

The initial driver of outsourcing-adoption may have been cost reduction, but it is about being able to do things differently and better with outsourcing, said experts.

The benefits are far more strategic- for one, outsourcing non-core functions allows professionals to attend to key business needs and allows greater focus by internal staff on adding value to business.

Lesica said: “Maturity in the off-shoring industry has led to new opportunities and trends.” Outsourcers now offer higher level skills including subject matter expertise. “It is now possible to have a mix of geographically dispersed teams, onshore, nearshore and offshore, providing high quality, multi-lingual transactional and knowledge based services.”

The rules for information outsourcing are similar to any other such arrangement, experts added. Professionals must define the services and service level, and identify the business targets.

While outsourcing has a history of success and business prosperity, it is crucial that professionals understand company goals and assess whether they can be achieved in house. “Only when they have ruled out in-house possibilities must they opt for outsourcing, rather than simply following the herd,” said another consultant from PA.

JISC has produced a paper, in association with the Universities and Colleges Information Systems Association (UCISA) and Universities UK, which assesses outsourcing of information services such as email and data storage. Institutions should “think carefully about the hidden costs such as service down time that is out of their hands and ensuring that legal issues are covered in setup”, it concludes. It also found that the risk of confidential data being lost or stolen is 43% higher when it is outsourced rather than held in-house.

For many institutions a critical question is whether to outsource all their email services or just students’, noted the report. Outsourcing staff

e-mail may bring additional privacy and confidentiality issues (for example under the Data Protection or Freedom of Information Acts).

Email and data storage services from Google, Microsoft and others rely on using servers across the world to ensure resilience and robustness. However, these third party providers may not be able to guarantee that the data would be held on UK or EU servers and will not become subject to a foreign country’s jurisdiction. It may also prove necessary to inform every user affected by what is being proposed.

Seeking the perfect mate

Another study, by consultant Duke and Jordan for JISC, examined the challenges of engaging in shared services. It identified problems in establishing and maintaining satisfactory partnerships; reluctance to rely on a third party for service; concern over loss of local control over critical services; and problems incurred in running re-procurements or severing the partnership and reluctance to have data stored elsewhere.

According to the briefing, investing in shared services can help further and higher education (FE and HE) save costs in a number of ways, although many senior institutional managers have not yet properly evaluated the potential strategic benefits.

Experts note that FE and HE institutions can identify services to be shared between institutions to improve delivery and release resources to further support teaching and research. Shared services can free up staff-time for more customer-service oriented activity, leveraging transformation, gaining competitive advantage, collaborating with other institutions and making it possible to offer otherwise unsustainable services, among others.