DIY (Do It Yourself) is fast catching up with global corporations who have been a cash cow for IT Companies globally. While only the big moves make it to the headlines, a regular shift from IT companies to company-owned IT captives (that originally started as an exception) are increasing in pace, much to the worry of almost all IT majors.
Initially, the IT Companies who used to look for multimillion-dollar agreements spread across ten years, have now already reconciled with smaller and shorter duration deals. They still struggle to keep the idea of DIY away from the CIO’s mind.
ScrumStart did a two-year study to find out the key reasons for this increasing trend and found surprisingly only one trigger that was common to 88% of the respondents; “Trust.”
More than a hundred CXOs who were interviewed answered that ‘Reduced Trust’ was the principal reason for their impatience which made them look for new options.
ScrumStart research found that there are primarily two reasons for ‘Trust erosion’. First is the lack of values and secondly the lack of competency. CXOs were open in expressing their frustration on having to do more with a reduced budget year on year. This is where their trust with their providers is taking a hit. Very few vendors provide different alternatives, new technologies, and lower costs. Even though many service providers boast about it, they fail to stand up as right partners. The unwillingness of service providers to automate their existing operations and reluctance to compromise on their cost makes the CIO look at other options discreetly. When such a CIO finds that the DIY option is minimum 30% lower in price and wonder why they have been paying the service providers so much all this time. Once this trigger is pressed, it is natural for trust deficit to increase. CXOs with higher strategic outlook are quick to move on to the DIY model.
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ScrumStart found five critical reasons for the DIY trigger and created ‘Trust Business Excellence Model’ (TBEM) to provide a far better alternative to CXOs who want the best but do not see an easy option beyond what they are already doing. ScrumStart TBEM model stands out as an option that is becoming increasingly popular with CXOs globally.
1. Lower Cost: On an off-shore, to off-shore rate comparison ScrumStart provides an average of 30% reduction in charge without any compromise on quality or flexibility. Trust pricing model that is essentially cost-plus transparent pricing is created to ensure that ScrumStart is not focused on maintaining its margin year on year as the markup is fixed before the agreement and the focus after that is entirely on getting the best-suited resources. The customer here has a choice to manage the resource mix based on what savings they want to achieve.
2. Owning Talent that Customer has invested into: Unlike the prevailing trend of moving out trained resources and replace them with the green ones (primarily to maintain the margins) by IT providers, ScrumStart believes in investing them with the client. The client manages ScrumStart resources entirely. Training of the talent, appraising their performance and owning them, makes transparency work at its best with ScrumStart trust business excellence model.
3. Innovation: Innovation has become essential for every corporation to survive and grow and CIO plays a crucial role in making innovation work for the business. The R&D labs and partner ecosystem of ScrumStart provide low cost and highly effective innovation alternative to CIOs. The Intellectual properties if not already existing with ScrumStart or its partner ecosystem can be shared, or patent filed for the client entirely.
4. Flexibility: Resource on-demand, short-term projects, bringing in experts, built-operate- transfer and presence in global locations are some of the flexibility that ScrumStart provides to its customers giving them more flexibility than they can achieve otherwise.
5. Low risk: DYI brings more risk than many companies are willing to take for the financial benefits they can deliver. High Capex is another area that eliminates any chance of early ROI that can even extend to three years. With partners, the most significant risk is the loss of talent that companies have invested in by training them on their systems for years. ScrumStart eliminates every element of risk and reduces them considerably for their clients. Option to own the resources, maintaining the team and allowing complete access of the team to the client, total Capex investment on behalf of the client are few such critical benefits of ScrumStart Trust Business excellence model. Tax and regulatory issues are taken care of by ScrumStart expert team, and client focusses on what they should be doing – Creating high business value using technology.