Managing IT Outsourcing in Abu Dhabi National Oil Corporation - Essay Example

Managing IT Outsourcing in Abu Dhabi National Oil Corporation (ADNOC) Name Institution Date Table of Contents Running Head: MANAGING IT OUTSOURCING IN ADNOC 1 Managing IT Outsourcing in Abu Dhabi National Oil Corporation (ADNOC) 1 Table of Contents 2 MANAGING IT OUTSOURCING IN ADNOC 10 2 2 Managing IT Outsourcing in Abu Dhabi National Oil Corporation 3 Executive summary 3 Problem description 4 Project team 4 Alternatives 5 Stakeholders and benefits 5 Operations 6 Financials and Metrics 7 Implementation, status and traction 8 Risks 8 Conclusion 9 References 10 Managing IT Outsourcing in Abu Dhabi National Oil Corporation Executive summary Abu Dhabi National Oil Company is one of the leading companies in the United Arab Emirates. It provides to millions of individual users and manufacturing companies. In the desire to develop an added advantage and grow its customer base, the company decided to improve its service delivery through outsourcing IT support services. Although decisions affected some workers, it was worth implementing to improve the performance of the company. The general performance of the company was aided with the efficiency of the new system since it emphasized accountability and transparency. Time wasting was greatly reduced. This report represents the implementation process of the whole idea commencing with stating the need for the process in problem description. The team involved in the projected is also mentioned briefly. The importance of the process to stakeholders is also recounted. Operations looks at the working of the process while as financials and metrics looks the logistics of funding and making the program a success in the company. Implementation shows the process of putting the program in place while risks discuss the various challenges and drawbacks that the company faced in the process of introducing the program. The conclusion recaps the high points and importance of the process. The report provides an insight into the implementation of outsourcing program. Problem description Analysis of the Abu Dhabi National Oil Company indicated increased crisis in regard to execution of various tasks efficiently. Management, financial, and human resource problems have been observed in the organization and hence compelling the adoption of IT support-service adoption. Various departments of human resources within the organization has occasional a crisis in management (Chittenden, 2010). There were hitches as far as management of human resource was concerned. Employee benefits schemes, payrolls, and other human resources inadequacies are the ones that led to initiation of outsourcing as a solution to deal with the rising inefficiencies. Communication systems used by the company were found to be wanting and the entire system needed an overhaul as the company relied on outsourcing in the meantime. However, outsourcing IT services has played a critical role in solving the deadlock in many issues that threatened to cripple the operations of ADNOC (Bourne & Mills, 2002). The company experienced problems in its effort to buy and subsequently install advanced and sophisticated technologies which would provide high level of IT services. The company therefore needed experts to provide IT services that would cover its extensive services. Outsourcing of IT support service was seen as the best chance of the company to improve its service provision. Project team The team members of the project mainly consisted of IT specialists and members from the companies where the IT services were to be outsourced from. The human resource department was actively involved in preparing the send off the affected workers and drawing new duty description for the remaining workers. The shareholders of the company provided the necessary consent to of going ahead with the plan to use outsourcing to provide IT support services to the company. The management of the company was involved in the implementation of the program from the beginning (Desai, 2009). It was important for every member of the team to work in support of each other. The need for the member to stick to the course of the program was very important. All other individuals who took part in the implementation of the project consisted of the crucial project team. The program has to be delivered within a specified time frame which is convenient. Alternatives Alternatives of the program were drawn from the internal solutions to the prevailing problems. It had been suggested that the operations between various departments should be synchronized and refined to give a clear course of work functions. Every department had to look at its processes and review them in regard to service delivery (Kobayashi-Hillary, 2005). The major alternative revolved around improving the functions of the company without involving outside IT service providers. Not very many alternatives were debated in the course of implementation of this program. Other alternatives would have been developed in the case of a grounding of the though out program. Stakeholders and benefits The company stakeholders were happy to see productivity and efficiency being household names in the operations of the company. Laborious manual records and spending a colossal amount on clerks’ salary and other miscellaneous expenses that made the company realize reduced profits. Cultural change has been initiated at ADNOC following introduction of outsourcing of IT traditions and relationships within the company changed massively in regard to the choice of outsourcing of IT services. Execution of tasks by human resource demonstrated this fact. The human resource department had to be reorganized to take care of the retrenchment that was carried out (Pepitone & Bruce, 1998). Employees that were highly productive were spared while those who indicated signs of laziness and lack of commitment were send packing. The aspect of quality was given first priority as the management contemplated on production. The input of the service provided were highly vetted and scrutinized to ensure near perfection in the execution of duties. The practices of management were also enhanced by the implementation of the program in the company. The conduct and behavior of mid level managers changed for the better as the interest of the company and its objectives was considered in every organization decision made in the company. The concept of accountability and transparency was enhanced. Chances of fraud and corruptions were highly reduced following the adoption of the outsourcing of IT support services. Monitoring and supervision became easier than before as a single supervisor got an enhanced role of monitoring performance through advanced IT functions. All stakeholders made necessary contribution towards the success of the program. Operations ADNOC has experienced inflated costs as far as spending on human resource management is concerned. IT increased use in business has resulted into escalated competition globally as every business enterprise seek to increase efficiency and productivity. Sizeable budget is needed for successful implementation of IT services and getting competent IT personnel into the business. The IT sector was particularly opposed to the idea with the fear that their jobs will not be secure or that they are going to be taken over by computer processes. ADNOC management came up with goals and objectives of seeking outsourcing services. They had to try as much as possible to win over the support of the employees (Chittenden, 2010). The benefit of the program was outlined to every organization member to analyze. The employees studied the pros and cons of the whole process. Word spread to all the departments concerning the implementation of the program. Necessary training and development was carried out to the relevant members of staff who were crucial to the implementation and execution of the program. The management felt the need and urgency of the change and created mechanisms that led to successful implementation of the change through IT outsourcing from high quality providers who could be vetted. It was timely for the program to be initiated when the management highly needed it to turn around performance. Financials and Metrics There was great need to cut now on spending on internal IT services that did not offer the required standard of efficiency needed to maintain a high level of productivity. A good budget was needed to pay the companies that provided the IT support service to Abu Dhabi National Oil Company. The company is state owned and therefore, it took not so long before the required amount of money and modalities of working were drawn. The available funds for the program were set aside in advance to ensure that the whole process came through without being compromised. The budget control team looked at the spending and established limits on how much should be spent on the project (Kobayashi-Hillary, 2005). The costs of the whole process were estimated before the setting up of the budget amount. Money was needed to pay off the workers whose services were terminated as well as hire some support personnel who were versed with laid down the ground work for IT functions. It was important not to inflate the budget that would have reflected on the program as being expensive. Implementation, status and traction IT service outsourcing has led to a culture of quality assurance and competiveness. The IT system to be used was installed in appropriate manner in the numerous departments. Some of the multiple chores were dealt a blow as the system finds a way of synchronizing its operations without duplication of duties. Overlapping situations made it very difficult initially for the organization to achieve its objective (Bourne & Mills, 2002). The functioning of different department within the company has been upgraded. The company studied the process and cons of the move before finally deciding to implement it. The program raised the status of the company and made it to be among the high service providers in the country. It was easy to monitor and supervise work in various department of the organization. The implementation period and evaluation time were ell spelt from the beginning of the program. Risks IT implementation experienced resistance in the organization with the fear of job losses or requirement of extra training and career development. Consequently the decision to seek outsourcing of IT services received equal and even more resistance that before from the employees. Many of the workers were skeptical in regard to outsourcing of IT services in the company. Some of the overhaul process required that some of the employees will be affected since their services would not be required (Solli-Saether & Gottschalk, 2011). There are a few employees who had to be laid off following the new arrangement. The objectives and goals of the company had top precede the employees’ welfare for the sake of increasing productivity and efficiency. The risk of loss of morale of the remaining workers was countered through vivid explanation of the importance of the program to the company and its efficiency as well as productivity. Lack of information about a program may result into misrepresentation and selective discussion (Tho, 2005). Job loss and job insecurity is one of the dangers of risks that were experienced with the implementation of the outsourcing of IT service. These repercussions if are not checked well can lead to decline in workers motivation for fear of imminent change within the organization to pave way for implementation of a new function (Leimeister, 2010). Fear of job loss can act negatively for the company and there is need for the management to look into the issue with expediency. Conclusion Abu Dhabi National Oil Company has grown to become one of the formidable oil corporations in the Gulf region. The IT function and the decision to outsource for IT support services greatly increased efficiency and productivity of the company. Some losses were reduced as half-dedicated employees were retrenched and functioning of department closely monitored. Outsourcing of IT services gave a chance for the company to experience competitive bidding and choose the best service provider. High class service was provided that improved the function of the various department of the company tremendously. The consumers in the UAE appreciate the impact brought about by the initiation of the outsourcing of IT services in Abu Dhabi Oil Company. References Desai, J. (2009). It Outsourcing Contracts: A Legal and Practical Guide. London: IT Governance. Chittenden, J. (2010). IT Outsourcing Part 2: Managing the Sourcing Contract - A Management Guide. Berlin: Van Haren Publishing. Solli-Saether, H, & Gottschalk, P. (2011). Managing It Outsourcing Performance. Boston: Idea Group Inc (IGI). Tho, I. (2005). Managing The Risks Of It Outsourcing. New York: Routledge. Leimeister, S. (2010). T Outsourcing Governance: Client Types and Their Management Strategies, New Mexico: Springer, Pepitone, J. & Bruce, A. (1998). Motivating Employees. Sydney: McGraw-Hill Professional. Bourne, M. & Mills, J. (2002). Strategy and Performance, Volume 3, Cambridge: Cambridge University Press. Kobayashi-Hillary, M. (2005). Outsourcing to India: The Offshore Advantage, New Mexico: Springer. Read More