Outsourcing it’s IT, Kone is focusing on its core competencies
QUESTION 1
What are the major drivers of the outsourcing at Kone?
The major drivers of Kone outsourcing are:
1. Internal IT processes were insufficient to support the globalization expansion.
2. IT costs were growing rapidly, but the company’s contribution to reduce the administrative cost of global sales is minimal.
3. None of the regional IT infrastructures was integrated, nor were they connected and compatible.
4. Kone was managing different IT platforms around the world with a variety of home-grown and nonstandard applications.
Why did Kone elect to work with several vendors?
The reasons why Kone elect to work with several vendors:
1. By using two separate vendors promised the best of breed approach.
2. Help in managing Kone different data centers.
3. Can help Kone in ensuring high availability environment.
4. Help Kone in managing real-time data on product sales, profitability and backlogs.
QUESTION 3
What are some of the risks of this outsourcing?
Risks of IT outsourcing:
1. Failure to identify core and non core may lead to outsourcing the core activities.
2. Difficulties in managing outsource relationship if lack of skills and competence.
3. It will increase the cost of relationship management.
QUESTION 4
How can Kone control its vendors?
Kone used the online meeting approach. By applying this method Kone can manage its outsourcing partners. On the other side, the collaboration and team working spirit can be seen where SAP and HP can meet regularly.
