IT Service Provider – Trusted Technology Partner
Sales representatives, account managers, project managers and implementation specialists, as well as programmers themselves – in other words, the entire team responsible for the fulfillment of the contract with the customer – have been arduously working on changing the image of the service provider and building essential trust. What is such work based on? Firstly, the development of effective communication methods between the parties involved. The market has evolved over time, the terms of cooperation have stabilized, business relationships have changed, and more and more often, the client has a desire to strengthen cooperation, which can bring greater operational effectiveness as well as measurable benefits for both parties, not least in financial terms. However, certain conditions must be fulfilled.
Most of them are related to the broadly understood quality of cooperation that the service provider must offer to gain the trust of the customer and deserve to be called a professional partner. I will focus on a few selected factors only.
Ethics and loyalty in business
The principles of fair play, meaning how the parties treat each other, how they fulfill promises made in business meetings and negotiations, and how they talk about each other after cooperation has been completed, can all be called business ethics in general. These are by definition unspoken rules, because no contract is able to ensure loyalty, but without them, business cooperation cannot meet the expectations of both parties.
Expertise / technological competence
Technological competence, or the so-called technological stack offered by the service provider, and therefore the scope and level of expertise in the technology delivered, is extremely important from the perspective of trust in business. The technology partner needs to have specific skills, by which I don’t mean image, but the objective professionalism that allows for fairness in cooperation. Both competence in terms of the technology used in the project and knowledge and design experience beyond the scope of the contract are important here, as they help to rise to unexpected challenges that may arise in the project.
Maturity of the services rendered
The business maturity of a technology partner is manifested in experience, the ability to anticipate, and the awareness that the work done for the client is really an investment in the future and development of his own business. In this case, I chose the three most important areas to focus on: involvement, planning and timeliness. Of course, you can create a long list of qualities that show the maturity of your business partner, but these are undoubtedly key in building trust. Involvement is expressed in an active approach to the project undertaken jointly with the client. There is no question of passively waiting for allocated tasks. For example, in the team-extension model of collaboration, the members of the service provider’s team will not only carry out the tasks assigned to them, but also demonstrate their activity in more complex issues such as planning the architecture of the target solution, creative problem solving, or offering best-of-breed tools.
Correct planning and punctuality are very important, if not the most important, factors, and most often depend on whether trust is built between both parties. For this reason, an estimation is created on the contractor’s side pertaining to the time required for development and other necessary work. On this basis, a timetable is established. The partner’s business maturity can be seen in estimates of time-consumption that are realistic and not just created to offer a better deal. An experienced technology partner knows how much time it will take to complete the project, so estimates will not be artificially underestimated or inflated (which is likely to be the case with an inexperienced supplier who fights for a price at all costs or fails to adequately estimate the time needed and bumps up the estimation as a result). Experience and maturity allow for the creation of a plan for which the supplier will be able to take responsibility, and deliver the product on time.
The client and design challenges
We must not forget the client in all this, as in the end, cooperation has an effect on both parties. Without a suitable approach on the client side, a true partnership in cooperation is obviously not entirely possible. The customer should have the flexibility, commitment and good will to cooperate with the other party. Aspects of a project where significant customer flexibility can be significant are:
- the start date of the project, if more advanced preparation is required or if it is better to wait for a specialist with the requisite skills who may not be available immediately,
- the tools and technologies used, if the technology partner presents substantive arguments in favor of changing them;
- the work mode, for example, work done remotely by the service provider’s team,
- service hours if the standard work hours for the customer are different from those proposed by the service provider (a frequent phenomenon in the case of international co-operation),
even if at the beginning such changes were not assumed.
In addition, over the course of the contract, the parties may encounter various potential challenges which they must face in order to continue the project smoothly. I will refer here to examples in terms of body leasing / team leasing cooperation:
- the need to undertake proper onboarding processes,
- challenges in communication,
- the willingness of the person working on the project on the service provider’s side to change the project,
- the likelihood that the person responsible for the project on the service provider’s side may change job.
The client may not have a direct influence on some of these situations, and, if understanding and engagement are demonstrated, it is proof that he or she is willing to engage in a partnership with the service provider.
Win – win
If each party understands that a win-win situation is possible in the outsourcing relationship, and apart from short-term business goals, other values such as loyalty or partnership count, then we may expect that cooperation can be truly long-lasting and fruitful. In such cases, the benefits are evenly distributed, so that both parties are committed to growing them and to the continuation of cooperation for as long as possible. And isn’t that what it’s all about?
New outsourcing project for the medical sector
JCommerce has commenced cooperation in .NET technology and outsourcing model with a leading manufacturer of innovative hearing solutions.
The Swiss company is constantly refining its high quality. Therefore decided to accelerate patient handling time and digitalize part of its visits. A patient can do the hearing experience test at home before visiting the clinic, and answer detailed questions in an online questionnaire. All the information gathered can be analyzed by a doctor at the clinic before the patient’s visit.
The solution which JCommerce is developing is intended to significantly improve the work of physicians and the quality of patient care. The new system will make the client’s interaction with the medical service easier and more pleasant.
France – order automation
Logistics processes, especially in large warehouses, might be complicated. The company needs to find the ordered product or products easily, pack it, and deliver everything on time to the buyer.
JCommerce has created a system for the French company Envoi du Net. The system automates the order processes in its warehouses. Moreover, it collects online orders from different places and communicates with dedicated devices in the warehouse and multiple external systems to process orders.
As a result, the system facilitates warehouse management and speeds up the execution of orders.
Reduce Uncertainty in Business
A safe haven seems to be the idea of a network economy in which companies coexist on the basis of partnerships and mutually interchangeable services. Instead of competing, there would be a gentlemen’s agreement in which each party develops in its specialist field. And specialization is the way to gain unique value, differentiate yourself from others, and also maximize profits and stability in today’s uncertain environment. In a network economy where companies constitute a network of connected vessels, the risk is scattered. But such a model requires one of the most scarce resources – trust.
How to build competitive advantage?
From the point of view of survival on the market, the most important element of the company is its competitive advantage, which is what distinguishes it from other companies in the same industry. Traditionally, it can simply be price, but also prestige, i.e. consumer brand recognition, the high quality of products or services, experience in the industry, or knowledge. A common feature of these elements is their uniqueness, the internal characteristics of a particular organization that enable them to offer products and services of a certain value to the customer, leaving competitors behind. Features such as the ability to offer a lower price than others, but still earn a profit, or to build a reputable brand, are very difficult to copy. And it is on precisely these characteristics that organizational strategy should be based. Consequently, the greatest effort should be invested in developing these unique qualities. If a company “spreads itself too thin” it will be at the expense of investing in key activities.
The solution is the network economy, i.e. an ecosystem of many companies which focus on the development of their unique characteristics, and work together in other areas to develop mutual benefits. What are these benefits?
- reduction of uncertainty – resulting from the sharing and spread of risk. The network of dependency ensures cooperative behavior, rather than competitive;
- access to scarce resources and skills – especially important in knowledge-based industries; companies no longer have to compete with each other for specialists, competences become a service;
- new development opportunities and access to knowledge – thanks to access to the business partner’s knowledge and experience, the company gains a broader view of its situation and the ability to utilize solutions that it would not have considered if left to its own devices;
- increased flexibility – web services are implemented as and when necessary, on demand, without wasting time, which arises in the traditional model due to the need to obtain appropriate resources independently
IT is a highly specific industry. On the one hand, every company, regardless of its area of activity, is forced to use widely understood IT technology. On the other hand, competence in this area is relatively difficult to access. This means that a business may invest in a digital transformation of business strategy, but investment in the development of their own IT team does not often go in step with the abovementioned focus on what the company really does, i.e. its specialization. Should a furniture manufacturer, for example, begin to build extensive IT structures, and hire teams of developers and administrators? The problems in this case are the costs of infrastructure, the high costs of salaries and training required in this industry to keep up to date in the dynamically changing market, and the need for specialized knowledge such as a management team.
No wonder, then, that most companies are looking for a business partner who is in a position to take IT projects on. Companies offering IT services, such as those which specialize in IT technologies, employ professionals who have essential, often niche competencies, and with design, business and industry expertise. Business partnerships can be highly fruitful in this case – as in the previous example of the furniture company working with an IT service provider, which can therefore focus on the most important aspects of business, such as product design, production, marketing, or sales. It draws on the benefits of cutting-edge technology such as optimization of the production process, automation, data analysis, and adapting the product to the client’s needs (e.g. so-called mass customization). The IT partner thus acquires specific design and technology expertise from the client’s industry, thereby gaining an advantage in the market.
IT services which are worth utilizing:
– talent leasing and team leasing – talent leasing, which enables the recruitment of a specialist, especially in situations when such skills are difficult to come by on the labor market, or a whole team of specialists selected for the optimum implementation of a particular IT project.
– IT consulting – due to the fact that information technology is so deeply ingrained in all aspects of the company’s operations, IT services are becoming more and more popular, meaning that companies can obtain information on technology and business opportunities in their area or industry.
– IT Transformation – IT has the potential to introduce revolutionary changes in any company, no matter what kind – whether it be product manufacturing, service providers, commercial firms, financial companies, health care facilities, and so on. Technological transformation should, however, be carried out in a well-thought-out, orderly manner with clearly defined objectives. IT Transformation is an end-to-end service in which a technology partner carries out an in-depth analysis of a company’s processes, presents a plan for their digitization and optimization, and then follows the digital transformation plan of the company step by step.
Competences as a Service – Talent Leasing Solves Recruitment Issues
With such high demand for IT specialists nowadays, companies are often forced to compromise, resulting in the hiring of workers who subsequently fail to meet expectations. Can talent leasing help companies solve their recruitment issues?
JCommerce, the leading provider of talent leasing services, has published a white paper which will give you an in-depth insight into key issues and opportunities in the recruitment of IT professionals.
Download your complimentary white paper to learn:
- What are the issues on the IT recruitment market?
- What is talent leasing?
- Pros and cons of talent leasing.
IT outsourcing Helps Companies Solve their Recruitment Issues
I have prepared a list of the most important benefits of outsourcing, but also – to balance the arguments – a list of risks and threats that we must consider when deciding on such a service. So before I go on to present the benefits that the knowledge and skills of our specialists provide our customers with, let’s pause for a moment to analyze any potential threats. During the process of preparing your own company to use an IT outsourcing service provider, you should consider the risks that may arise during such cooperation. Below is a list of some of the most commonly encountered threats along with possible ways to mitigate them, on both the provider and customer side.
Possible risks that you may want to consider, whether by yourself or together with your chosen provider, may include failure to accept and support part of line management and staff in the assignment of tasks to an outside worker, as well as communication issues or the possibility of knowledge loss. If we are aware of these threats and openly discuss them with the provider, it can go a long way to minimizing or even eliminating them. It is essential, however, to prepare mutual trust, knowledge and planning, as well as continuous monitoring of the effectiveness of outsourced activities.
Get your company ready for outsourcing
Outsourcing on a certain scale, such as when we involve the entire external development team, can become a strategic process which deeply rebuilds the structure of the company and influences the functioning of its processes. For this reason, the decision to delegate certain tasks to the outsourced team must be preceded by sufficient preparation, which consists of the following steps:
- an analysis of the needs and situations requiring the involvement of an external specialist;
- planning cooperation with the provider, requiring the designation of decision-makers who will be responsible for operational contact with the provider, as well as the preparation of appropriate internal communication which will prevent any conflict or misunderstanding of the role of the external specialist;
- planning the process of selecting the right provider;
- planning the introduction process for an external employee or team;
- monitoring the effectiveness of the service and accomplishing the entrusted tasks.
Benefits of outsourcing
So if the service provider is able to guarantee from their side that the risks are minimized and the potential consequences are mitigated, and the client plans the process of introducing outsourcing services adequately, the enterprise will begin to benefit relatively quickly from the involvement of an external specialist or team. A carefully considered and structured process of partnering with the provider and the subsequent deployment of an outsourcer to our project will free up our internal resources or allow our employees to move to other jobs. In addition, the outsourcing model will allow you to experience the following benefits in the short term:
- no recruitment costs – the outsourcing company bears the cost of acquiring an employee in exchange for a later opportunity to make a consistent profit from outsourcing;
- swift access to the required specialists, due to the outsourcing company’s resources and established candidate database;
- contract flexibility – immediate response to the increasing or decreasing need for employees;
- matching the competences to the needs of the project and the possibility of substantive support in the project from the service provider’s side in case of unforeseen situations;
- outsourcing does not increase the fixed costs of your business;
- the invoice received from the outsourcing company can be counted as a project cost;
- no costs associated with vacation and medical leave;
- the possibility of exchanging an employee whose work is unsatisfactory with a notice period agreed with the provider;
- savings in terms of the cost and time spent on searching for and selecting candidates;
- reduction in the risk of selecting an unsuitable candidate;
- no HR and payroll costs.
To outsource, or not to outsource? That is the question…
At this point, it is worth considering when to use outsourced IT staff. Here is a list of these situations:
- a large number of applications are sent to the company, but the effectiveness of the recruitment process is low;
- candidates withdraw from the interview process at an early stage of recruitment;
- we do not have an appropriately recognizable brand as an employer hiring IT specialists;
- we observe constant staff turnover and people frequently leaving a job during the course of the project;
- we need to complete the project in a timely manner and / or to start work on the project within a short timeframe (e.g. up to a week);
- we do not have a sufficient number of tasks to entrust to IT professionals to ensure effective working hours, or our projects are somewhat seasonal in character;
- we would like to build a new team or department in a relatively short space of time.
The outsourcing company will be better than us in terms of carrying out certain recruitment tasks, due to – among other things – consistent and intensive presence on the candidate market, and the brand recognition of the employer. They also provide timely and flexible access to professional resources whenever it is deemed necessary, and not only when suitable professionals can be provided. IT outsourcing is primarily a choice of operational strategy that enables the company to quickly adapt to the business environment, internal requirements and customer expectations.
IT Outsourcing Agreements Under the Magnifying Glass
Let’s take a look at non-disclosure or data protection agreements, which is the most common agreement that we use here at JCommerce. It’s something that starts with cooperation really, and makes the trust between both parties just a little bit stronger.
This type of agreement specifies who is who in the business relationship – just explaining which companies are the signatories, where they’re registered, their official ID numbers and so on. It is important that the person who signs the agreement on behalf of the company, for example the CEO, should be listed as such on official documentation or should have the official acceptance of the board of directors to sign such documents. Don’t be afraid to hand over company information if the Contractor asks you for that as well. From their perspective, they would just like to be sure that they’re signing the right contract with the right person as well. I think this is just a normal part of doing business.
Another very important point to include in the NDA relates to definitions. Remember that you may understand something very differently than someone else from another company. To avoid misunderstandings or miscommunication, it is important to put definitions at the very beginning. Remember to define what is “affiliate”, “confidential information”, “disclosing party”, “permitted recipients”, and “receiving party”. Write these definitions in a clear way so everybody can understand them, not just lawyers or the like. The language should be simple, and definitions as short as it is possible.
As you can see, “confidentiality” is another very important element for the NDA to keep information private. The parties agree not to disclose any information they both sign at the NDA. Moreover, the parties can’t make copies of those Confidential Information. You should also consider whether you need extra 1:1 NDAs with the engineers or directly with the team that provides services for you. This is very common practice, because when you work with sensitive data your partners would like to rest assured that all information is protected.
Standard framework outsourcing agreement
At this level of the agreement we should specify further important details and definitions that define our business relationship and co-operation. And one more time, you should write those definitions in understandable way. At that point, when established with the Contractor, you can describe “business days” and “the worksheet”. Also, you should define the specification of IT services, the period of ordered consultation days and a person responsible for the implementation of the Agreement.
As you probably expect, it is just the beginning before your IT outsourcing agreement will be fully ready. Let’s take a closer look at the following parts of the contract like subject matter and obligations in an agreement – including the terms of payment, the force majeure clause or copyrights.
Subject matter and obligations
The subject matter of the agreement is the provision of outsourcing services by the Contractor for the Ordering Party, consisting in analytical, design, testing, programming, system maintenance and other which relate specifically to the area of software development and Information Technologies.
The services commissioned are based on Time and Material model, in which the Ordering Party agrees to pay the Contractor based upon the time spent by the Contractor’s Consultants and to perform the work. The services covered by such agreement shall be provided by seconded Contractor’s Consultants. A list of the team, their roles, order’s start and end dates, hourly rates and any other project or profile specific information, like e.g. communication methods, you should include at a separate written Order. Also you should include in the Order the purpose of the service order and scope of work, all schedules, living expenses (flight tickets, accommodation) and contacts. Of course, there is more aspects that you should consider, but those should be good at first.
It isn’t a secret that both parties have obligations to each other. The Contractor undertakes to carry out the work connected with the implementation of the provisions of the agreement and Orders. From the other hand, the Ordering Party is obligated to assign tasks and set timelines for completion of work to the Consultants according to the IT services identified in the Order. Furthermore, on your side is to ensure that Consultants have the possibility to work by providing them the access to worksite when necessary, and if needed secure access to devices, equipment and so on. I know that all of those information are logical, but it is good to have them written.
Nobody likes to talk about money, but when it comes to the agreement, don’t hesitate to do it. Focus on the formal issues like:
– how to calculate the total remuneration for all the seconded Contractor’s employees,
– where outsourced employees report the working hours,
– what’s the procedure when the developers have overtime work during business days or at the weekend.
Last but not least, every IT outsourcing agreement have two clauses, Non-performance of obligations and Force majeure event. Like I said at the beginning, agreements are for the bad times because we can’t predict the future, for e.g. war, natural catastrophes, explosion etc. Therefore, the Parties shall be free from any liability for total or partial non-performance or undue performance of the obligations specified in the contents of the agreement in cases caused by Force Majeure. In the end of the agreement you should include the Copyrights, IP Rights, Law and final provisions.
I hope that you realize now how value can be every piece of document at the agreement. Don’t prepare the agreement in rush, because every element is relevant for both sides. Do you recall my question from the beginning of this article? It was: do we really need written agreements? If you ask me, we don’t exactly need them, but nevertheless it is good to have them just in case. In other words, agreements are written not for the good times but for the bad times. Especially in the IT world.
Meet JCommerce at the UC Expo 2017
Between 17-18 May, JCommerce will be taking part at the largest Unified Communications and Collaboration fairs in Europe, UC EXPO in London.
The event UC&C is about solutions designed to provide flexible ways of delivering, managing and supporting communication across IT industry. Moreover, for all Visitors, there will be over 100+ free-to-attends seminars with world-class speakers.
IT Outsourcing Agreements – Be on the Safe Side
Watch the webinar and learn about the key elements that both parties should include in the contract to best protect their interests.
The Industry 4.0 – New Generation of Smart Factories
The contemporary equivalent to Detroit in the 1990s is the economy of Germany, which is still based on industrial production, despite the digital revolution. Here, however, the similarities end as, unlike their American counterparts, the German economy is in a very good state, with no sign of any change in the near future. No wonder, because it was here that the idea of Industry 4.0, the fourth industrial revolution, was born. It may sound somewhat bombastic, but it is worth taking a closer look at specific projects and solutions, as these are what make the German economy one of the most competitive in the world, notwithstanding the growing demographic problems associated with an aging population and ever fewer people of working age.
The Fourth Industrial Revolution
In brief, the first industrial revolution was based on mechanical production driven by the steam engine; the next revolution was mass production and electrification; while the third was the introduction of integrated circuits that allow automation into factories. As mentioned above, Detroit is the symbol of the exhaustion of the economic model created by these phases of evolution in industry. In the case of the fourth revolution, the driving force is the network, but in a much wider sense than the Internet itself:
- social networks, signifying the development of the network economy, based on a network of partnerships between companies, co-operation, and business networks,
- the Internet of Things – a key element of so-called smart factories, that operate based on a network of interconnected production machines equipped with sensors, readers and recorders that collect data and regulate the production process,
- the Internet of services – on the one hand, this means cloud services; on the other hand, the specialization and outsourcing of services, using a partner network, which is also possible thanks to the use of modern communication technologies, enabling work to be done remotely,
- the Internet of data – the use of both one’s own and external data as a resource to ensure the competitiveness of your enterprise. It also includes phenomena such as mass customization, or mass production including parameters identified by specific customers, as well as fog computing, the transient state between the local server and the cloud, and completely new ways of communicating – both within the company and with customers and business partners.
The Fourth Industrial Revolution has the potential to address some of the most pressing contemporary issues facing industry, and more generally the economy as a whole, such as innovation and productivity problems, demographic problems, and the necessity of developing industries that are ecologically sound, economically efficient, highly innovative, and bring more added value than the service sector, but are also less susceptible to economic crises (reindustrialization).
Paradoxically, Industry 4.0 is also a response to social unrest in highly developed countries caused by relocating production to countries where manufacturing is cheaper. It turns out that this phenomenon, which is typical of globalization, is losing steam. While in the United States this is simply Donald Trump’s unfulfilled campaign promise, many of today’s leading German companies, such as Adidas and Stihl, are bringing production back to Europe. But what has brought this on?
Offshoring production is becoming less and less profitable (due to rising labor costs in Asia, which is also the result of globalization), and does not ensure swift order fulfilment, which is especially important in industries such as fashion. The ever shorter fashion cycles (the days of having two seasons, spring-summer and autumn-winter, are already a thing of the past, as we now have at least eight seasons), as well as mass customization (Adidas has long been offering customers the chance to customize their own shoes online), mean that production is obliged to move closer to the customer. But production is usually much more expensive there. So robotics is the solution, and the German and Swiss markets are leading the way.
Bystronic and smart factory solutions
For many readers, the theory of the fourth industrial revolution may sound naive, like another idealistic economic stimulus project, full of murky definitions and unclear guidelines. Therefore, it is worth giving an example of how it can work in practice. To do this, I will use the example of the Swiss company Bystronic, with whom I have the opportunity to cooperate in person.
Bystronic offers advanced systems and services for industrial processing, including the cutting of various materials by means of laser and water jet, as well as sheet bending (for the automotive and shipbuilding industries). The equipment produced and used by the company requires specialized software that ensures the highly precise processing of materials. To that end, the company decided to establish a partnership with JCommerce, entrusting them with software development.
“The demand by many users for automation and digital process solutions is increasing. This trend is being intensified by impulses from the field of Industry 4.0, which are changing also the world of sheet metal processing. Software plays a key role in this transformation. Software solutions support users in the planning, interlinking, monitoring, and optimizing of all their processes. In cooperation JCommerce and Bystronic are working on new software solutions, in order to support customers within a world of automated and networked manufacturing”, Bystronic says.
JCommerce specialists are currently implementing software projects to support Bystronic by developing new solutions in the field of Industry 4.0.
Clearly, the strategy of Bystronic is the idea of Industry 4.0 in practice, meaning that the company is aware of the potential of information that can be obtained using industrial machines, connected to a common data processing system, in the IoT model. It also takes advantage of the opportunities that a network of trusted business partners brings, carrying out tasks more effectively thanks to its specialized nature. Bystronic remains a company in the industrial sector, it is still a factory above all – although a smart version – because it utilizes advanced IT technologies to a great extent.