IT fiascos will continue where IT is seen as "back office"

The latest in a series of outages, fiascos and scandals has put outsourcing under fresh scrutiny.

First, the RBS/NatWest IT problems led some critics to point the finger at offshore outsourcing. The O2 network outage raised questions over the mobile operator’s managed service. And now the G4S Olympics security scandal (with its shameless attempts to blame the IT) has national newspaper commentators debating the worth of outsourcing government services.

Labour leader Ed Miliband has joined in too, questioning the role of G4S and others in outsourcing (or privatising as he prefers to call it) aspects of the police. According to the BBC, “he was not opposed to private sector involvement, but said it should be restricted to back-office functions, such as providing computer systems.”

And here’s the rub. In every case above, outsourcing of IT has been implicated, even if the problems have nothing to do with the fact IT is outsourced. The telling phrase in Miliband’s comment is not the “private sector involvement” but the line “back-office functions, such as computer systems.”

The problem here is not the outsourcing of IT. It’s the attitude that IT is a back-office function, and therefore unworthy of strategic consideration.

As police officers increasingly rely on IT, and use smartphones as essential tools on the beat, how can that be seen as “back-office”?

All those RBS press releases over the past few years, announcing more job losses in “back-office functions” that included IT, were phrased as if to say, “Don’t worry, it’s not job losses in anything we do that matters.” I doubt many RBS executives thought IT didn’t matter when customers couldn’t access their money.

Is it possible to outsource IT and for it to still remain strategic? In some areas, yes – physical hosting of servers, running email, even important but mature applications such as payroll and accounts, for example – but it’s the attitude and the reasons for outsourcing that matter most.

Company executives need to stop looking at IT as a back-office function. The successful businesses of the future – and indeed the efficient public services – will be those that put technology front and centre in their strategic planning and customer/citizen engagement. Tomorrow’s leaders will see technology as a competitive weapon, not an administrative necessity. You don’t put your competitive edge in the back office.

Every company should debate the value of outsourcing – but should not question the strategic value of IT.

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