Organisations should rethink their outsourcing policies as many are resulting in a loss of competitive advantage through the inability to adapt quickly to new market conditions, National Computing Centre chief executive Michael Gough has warned.
Speaking at a conference to mark the user-focused organisation's 40th anniversary last week, Gough said the trend of outsourcing IT management problems during the 1990s had led to a different set of problems today.
"In many cases this has led to stagnation as suppliers have sought to make the most out of what is intrinsically a low-margin business, or milk technology cash cows for as long as possible," he said.
"Also, businesses have left themselves with little or no capability or capacity to identify, plan and execute transformational strategies, leading to poorly executed projects and programmes, and a malaise in the development of the business systems.
"This has to change today, or UK companies will fall behind their international competitors."
Gough stressed the importance of IT and its alignment with business process change for achieving true step-change business transformation. "There are no longer any greenfield sites," he said. "All organisations have legacy systems running business processes which would be uneconomic and uncompetitive to do manually. This means that information systems are of critical importance to all business. Anyone who says that IT does not matter is clearly very misguided."
Gough also warned that an architected and planned approach to legacy systems takes time, and recommended shorter project timescales to better cope with volatility in the requirements of the business.
"Large IT-led programmes are often doomed from the outset simply because they are too big," he said. "Big projects can also be compromised by not being geared to deliver economic or operational benefits in sync with the organisation's business plans."