Bookham Technology is disbanding its IT department and ending IT representation at board level.
The optical networks manufacturer expects to save £1.8m a year by outsourcing its IT infrastructure and support functions to
India-based company Ontrack.
John Barton, Bookham’s departing vice-president for IS, said, “We came to the decision on a cost analysis. We knew how much it was costing us to staff IT support and it worked out better to source from outside.”
The company’s migration over the past two years to a single SAP system had simplified the IT environment. This allowed strategic decisions to be taken by the board without specialist IT representation, said Barton.
The Bookham decision follows last month’s move by supermarket chain Somerfield to do away with the post of IT director.
David Roberts, chief executive of the Corporate IT forum, Tif, said Bookham’s decision was surprising. “If it works, quite a number of organisations would follow suit. It is essential to maintain IT strategy in line with the business and it is difficult to see how that can be done if the IT function is owned by a third party,” he said.
“While it is theoretically possible for an outsourcer to be close enough to do this, an outsourcer’s business is distorted by their own business needs.”
“It could work where there are well-understood procedures with IT working to a blueprint and, crucially, where no changes are foreseen in the next three years,” Roberts said.