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Cloud Computing versus Outsourcing – Nadhan’s Top 5 considerations

A few months back, I had blogged about the aftershocks triggered by Cloud Computing in the world of IT Outsourcing. In that post I had outlined the strategies that outsourcers would have to adopt to accommodate the paradigm shift to cloud computing. ZDNet blogger Joe McKendrick says that the line keeps blurring between IT outsourcing firms and cloud providers. This poses an interesting challenge to enterprises. How do they determine when to go to outsourcers and when to avail cloud services directly instead?


Here are my top five considerations that could be used to determine the approach that best fits your needs:


Automation. Cloud services are better suited for solutions that can be easily automated – repeatable processes with well-defined business rules. Outsourcers are better suited for scenarios that require significant manual intervention and a complex set of rules that need to be addressed differently on a case by case basis.


Integration. Outsourcers work better when there are multiple proprietary applications that need to be integrated without any standardized interfaces. Outsourcers could possibly build out these standardized interfaces as well, which could eventually facilitate a more seamless operation overall. On the other hand, cloud services can be employed effectively in scenarios that have a well-knit fabric of applications with out-of-the-box integrations with other applications that expose their functionality with standardized interfaces.


Customization. The level of customization needed for your solution is a key determinant. If the cloud services cannot be configured and tailored to suit the needs of your enterprise, outsourcers can be a more viable option. Outsourcers are more likely to be able to leverage their expertise with other enterprises in the same domain to make the adjustments required to the services they provide. This may include build out or extension of select components.


Interaction. Business functions that require extensive human interaction – (e.g., Help Desk, Call Center services) are better outsourced. You are likely to have a say in the manner in which your enterprise is presented to your customers and will need to have some control over the execution. Outsourcers may in turn choose to use cloud services as they deem fit to enable their underlying infrastructure compute, network and storage resources.


Localization. Cloud services are less likely to accommodate regional variations due to language, cultural mind-set, industry-specific constraints, local customizations of the generic services offered. In such cases, long-standing outsourcers within the region are more effective candidates than generic cloud-based services. Of course, market demand could drive the emergence of localized cloud service providers that cater to the regional needs.


These considerations can yield different answers for different enterprises depending upon the specific scenarios that apply. Moreover, as McKendrick states, the line is blurring. The answer could change over time. As new cloud services emerge and as outsourcers continuously continue to drive innovation in the manner in which they provide services, enterprises will need to fine-tune their ecosystem of service providers and outsourcers based on the considerations above.


How about you? What is the combination of outsourcers and cloud services in your enterprise? Do you have any other considerations in mind? Do your cloud service providers conform to an industry standard? Do they have personalities of their own? I would like to know.


Additional resources:

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Michael Bian | ‎11-29-2013 06:34 AM

thank you for sharing this article.

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