Outsourcing It: Is Your Company Ready?
If an organization believes it is ready for outsourcing IT
, the next thing it should consider is what should be outsourced. In the past, a knee-jerk reaction of a typical CIO was to outsource little to nothing. Why? Because many CIOs had to have their hands in everything to increase their perceived value to the organization. Fortunately, most CIOs today recognize the value of outsourcing the day-to-day tasks so that they can focus on strategic endeavors to move the business forward.
When considering outsourcing IT, organizations should develop a detailed process for thorough self-examination that incorporates all stakeholders, including key users, relevant executives and IT support staff, to form a steering committee. Together, they should define the organization culture, core business, current assessment of IT needs today, and their needs moving forward.
A good steering committee will first understand the core business and look to outsource the elements of IT that are not core to the organization. Michael F. Corbett of Firm Builder developed a litmus test of six questions to evaluate what is "core" to a business:
1. If starting your business from scratch today, would you build this capability internally?
2. Would other companies hire you to do this for them?
3. Will tomorrow's leaders of the company come from this area of the business?
4. Are you receiving world-class services at a competitive cost today?
5. Does this process create or defend a unique competitive advantage for your firm?
6. Is this business process directly contributing to business growth or expansion?
If you answered "no" to two or more of these questions, chances are you are a good candidate for outsourcing IT.
Finally, outsourcing IT means relinquishing control of systems and applications to a third party - there's just no way around this. If your organization can't stomach it - don't do it. Many people in IT have separation anxiety when they realize they have to move their infrastructure and data to an outsourcer's data center, or that an outsourcer will restrict administrative access to their system.
The key to overcoming risk and fear is proper management of the outsourcing relationship. If relationships are managed correctly through proper policies and procedures, these problems and fears can be mitigated. If company culture will allow it, an outsourcing partnership can create tremendous value.
If an organization thinks it is right for outsourcing IT at this point, and can commit the level of resources needed for the amount of work which lies ahead, it's time to consider developing a comprehensive selection process.
The selection process requires an objective and thoughtful analysis that leverages the reasons why a company may want to outsource and builds upon the business objectives required in the
relationship.
Outsourcing IT is a major cultural change that has implications a company may or may not be able to live with. The company needs to understand this and be prepared to put in the required effort in order to achieve the best chance of success.
Outsourcing IT does not have a "one size fits all" approach. If someone promises this... run. Cultivating the right outsourcing solution is a tailored process. During vendor selection, a company needs the right people involved to compare, on an apples-to-apples basis, the vendors' capabilities, strengths, weaknesses and flexibility. The selected vendor must align with the company culture for the greatest chance of a successful partnership.
by: Chuck Vermillion
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