Weighing the merits
Choosing the right path forward depends on a careful analysis of each sourcing option based on the following criteria.
* Sourcing flexibility. Making a decision based on flexibility often comes down to the organization's appetite for ongoing change. For example, the on-premise model can offer a high degree of flexibility, provided that the network architecture is modular enough to be able to move vendors in and out as need dictates.
But let's face it: Not every organization wants to retain responsibility for evaluating a succession of vendors. Here's another problem: flexibility often comes at a price literally. Transition costs can be high when swapping out vendors, and performance can sometimes suffer during the switchover. For this reason, some organizations opt to contract with a service aggregator which, in turn, takes the headache of managing vendors off their hands.
* Retention of control. Companies that want to retain maximum control generally opt to completely insource their networks. That may not be the best strategy for you, however. For example, it could be costly to manage a global network spanning many countries with thousands of branches. Insourced network management requires having skilled people in sufficient numbers, a commitment to ongoing training, regular upgrades to technologies and tools, and a super-efficient governance capability.
* Migration elasticity. The flexibility and speed with which users are migrated to an externally sourced network platform is a critical point to weigh when making a decision about a sourcing model. The architecture should be able to support both slow and "bursty" on-boarding rates. That is, some migration will occur as part of an overall transition plan and take place in a measured way. At other times, such as following a major business acquisition or merger, a large number of users will need to be migrated onto the platform very quickly.
* Flexibility for growth. Many organizations are concerned about the extent to which their network architecture can be made flexible enough to support future business requirements. The service aggregator model and the end-to-end approach can be attractive to companies pursuing an aggressive growth strategy either organic or inorganic. Why? Because the network architecture of a world-class integrator or outsourcer is, by design, more modular and therefore can support growth more flexibly. On the other hand, the on-premise option might be more appropriate for an organization that does not expect a sudden surge in users from a growth strategy.
* Network economics. The final assessment criterion to consider has to do with network economics considering which network sourcing option offers an appropriate balance for your organization between cost savings and required features. Part of that determination involves a network economic analysis, which often starts with a telecom expense management (TEM) evaluation and then advances toward more sophisticated analysis of the sourcing options discussed here.
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