Agile rethink for traditional IT sourcing

IT sourcing has been done in the same way for the past decades. In a way which is not either cost efficient or rational. Melkki is changing that and has its unique way to do so.

Tuukka Ihalainen

13.12.2018

Diverse challenges of the old procedure

Traditionally, the outsourcing project starts with a status assessment phase. What happens is that the consulting firm collects information from different external sources in order to figure out, how other players are operating and doing business. This is only a review of current market situation - a time consuming and expensive way to start a project.

The other typical feature of traditional sourcing is that the scope in IT outsourcing projects is vast relative to business size and with little exception, the project is pushed forward with the full width of the contract scope.

Basically you are trying to change the whole world at once, though the truth is that dealing with the full scope at once is complex. Complexity is managed in transition when services are split into understandable pieces to be handed over to the (new) supplier. The problem is that it is way too far in timeline if (and when) any needs arise for making changes to the contract, finding alternative options for further efficiency or, in the worst case, changing the supplier. This means that we already see the iceberg, but our ship turns too slow to avoid the hit as there is little if anything we can do about it. The point of no return is already gone. When the project is ready, we need to start a new one, because the world has changed around us.

A paradigm shift of sourcing

Unlike some competitors, Melkki doesn’t want to waste anyone’s time or money by just mimicking or benchmarking. Innovation of new models and operations is the key, not repeating what everybody else is already doing. Our operation model consist couple of simple steps;

• Where are the current challenges in customer’s business?

• What are the strategic goals we want to achieve?

• What new do we need in order to achieve them efficiently?

Based on these, we draw a common strategy for the project, but by dividing the scope into smaller, manageable batches, doable in just 3-6 months. It enables actions at any point of time when needs arise, for one reason or another.

This is the way we do not hit the iceberg. If and when the world changes i.e. business processes, customer base, or technology changes on the way, we are able to take those into account during the process.

In principle Agile sourcing adopts ideas from:

1. Lean: every delivery should be managed in small batches from start to end limiting WIP

2. Agile: Small team of experts is able to i) manage increment or iteration, ii) learn from the previous iteration and iii) adapt to changing business environment

3. Lean start-up: Define the success criteria, build the best solution (MVP), verify and learn and improve to next iteration

We are happy to show you how sourcing is done smartly. So that you get what you need. Not what somebody wants to sell to you.