The contract, based on Dimension Data’s Global Services offering, TeamSource, is believed to be one of the largest outsourcing arrangements ever in South Africa and is Dimension Data’s first major outsourcing contract under TeamSource. TeamSource embodies concepts and process to ensure that the reasons most large outsource contracts fail have been addressed and uses GSOA (Global Service Operating Architecture) tools and process to achieve economies of scale in outsourcing previously only achievable after many years of contract operation.
Allan Cawood, Managing Director of Network Services in South Africa, said: TeamSource was developed to address areas in outsource relationships that often lead to failure. These include contract governance, innovation management, total cost of ownership targeting and annual service/price benchmarking.
The contract is structured to ensure that both Alexander Forbes and Dimension Data realise immediate and ongoing benefits from their relationship. This contrasts with many traditional long-term outsourcing deals which sour in their second or third year as a result of inflexible conditions which eventually prejudice one or both of the parties involved.
There is seldom any incentive on the part of the service provider to improve, or even maintain, service levels in the face of rising costs and squeezed margins. Under this contract the conditions are reviewed annually and benchmarked against international norms of best-practice to ensure the client Alexander Forbes continues to receive levels of service which meet its changing needs, while the service provider Dimension Data is fairly remunerated.
Alan Mowat, the Group IT Director of Alexander Forbes, says the company’s decision to outsource its second most important asset (after its intellectual property), was based on a strategic need to improve service levels while driving down the total cost of ownership of its IT infrastructure over time.
Staying abreast of IT developments is absolutely critical to any player in the Financial Services industry. Alexander Forbes had an excellent, but relatively small IT division which delivered cradle to grave services to the group. By outsourcing our IT operations to Dimension Data we will continue to receive these services, however we will be able to leverage Dimension Data’s economies of scale and technological leadership.
In addition, with the world-wide shortage of IT skills, we are assured of ongoing access to an enormous pool of skills. And our own IT people the majority of whom will now be employed by Dimension Data will benefit from the greater career opportunities which are open to them as part of a leading global technology group. However, we retain a small team of IT specialists who will be responsible for developing the group’s IT strategy, said Mowat.
