Why do companies choose IT dedicated centers?

Imagine that you are the organization that needs to change some business processes. For example, you are manufacturing goods and recently have acquired a new factory. You need to make sure that all business processes will be similar. For example, if you use Microsoft products, you want to have the same products in all your enterprises or subsidiaries. However, in reality, different enterprises can use more innovative management systems or the opposite — outdated ones. When companies use multiple software platforms for different operations, they require an Enterprise Service Bus. ESB increases organizational agility by reducing time for new products’ implementation. It is one of the most common reasons that companies implement an ESB as the backbone of their IT infrastructure.

What to do?
Every day the leaders ask themselves this question. You have many ways to improve your business processes. For instance, implementing the Enterprise resource planning system (ERP) or maybe ESB will be a better decision, etc.

Whatever problem you have, whatever strategy you want to use, you need to have a good team, experts, people with the particular knowledge satisfying your specific business needs.

Almost all big organizations work with consulting and/or outsourcing companies. However, they might face some challenges.

Is outsourcing a solution? Yes and No.
If you have an outsourcing remote team off-shore or near-shore, you can save your costs by choosing cheaper rates. But do you really manage the team? All people that work for outsourcing companies are not your employees, and you cannot control such things as talent turnover or job rotations.

The other problems could be — the low engagement of employees, knowledge keeping and transferring, no ability to meet your remote team face to face, and so on.

Consulting companies.
In contrast, consulting companies usually have excellent expertise, but the price for their services can be very high. They are often engaged in complicated tasks and big projects, which means they have limited availability and flexibility for smaller assignments or temporary recruitment.

So, do you have any other solutions? Yes, you do.
You can hire people as employees, but again, you can face the same management control problem if you have offices in different countries.

Today many big organizations try to set up IT dedicated delivered/support/expertise centers. To simplify my words, they try to create something like miniature IT companies within the company itself.

What does it mean?
Since all countries are not the same, organizations try to find the best location for these subdivisions by taking into consideration different factors, like salary costs, the job market, and attractiveness for foreign business — all of which can have significant differences. Other important elements include:

Life and business costs,
Local and federal programs,
Technical Universities,
A high concentration of tech talents,
A friendly business environment (state and federal corporate taxes),
Open-minded local suppliers ready to solve complicated tasks,
Domestic and international air/train connections.

Who can help to set up the dedicated center and enhance its success?

If you imagine that the IT center is an orchestra, HR will be its main violin. The success of the business starts with the best decisions being made on behalf of IT leaders. International HR experts should be able to demonstrate outstanding knowledge of the local job market, understand payroll and pricing models, labor legislation, and hire professionals with the required expertise. It is a multifunctional role that requires wide expertise in the following areas as well:

Evaluation of the business environment and selection of the best location, taking into consideration the social and economic situation of a country/region. Compensation management

Employer branding/communications strategy

Graduate recruitment and talent development

Efficiency is an indicator of personal and corporate success. A deep understanding of the industry and new technologies, as well as experience in human resource management, are important factors that can make success a reality.

References:

Bounderau John. (2011). The future of HR and effective organizations. Elsevier. 40 (4), 255–266.