Inside track: Gear up for best business practice

The argument for outsourcing appears to have evaporated, so focus instead on best sourcing.

The argument for outsourcing appears to have evaporated, so focus instead on best sourcing.

Shock horror: banks are in no rush to outsource. The previous number-one argument for outsourcing, namely cost control and financial advantage, seems to have evaporated.

Is it any wonder that outsourcing is no longer seen as the answer to everything? In the early 1990s, partly as a result of so many companies reeling from the disasters caused by downsizing, whole areas of technical support were outsourced.

Some high-profile deals were signed for 10 or more years. Now many companies are pulling these areas back in house, realising that in tomorrow's IT world, infrastructure and its associated skills are business-critical.

Then we turned to the next big thing: the outsourcing of applications development, with project teams and development being passed over to third parties. As many people predicted, this trend has faltered too.

This push-me pull-you approach is simply not working. It may be good news for the legal departments, but it is not good news for IT departments or the companies that depend on them.

The successful IT department of the future will focus on best sourcing. In doing this it will ask three questions, and adopt three roles:
  • What is best for my company? (Role: business broker)
  • Who will bring about the most effective change, fastest? (Role: change enabler)
  • What skills do I need to keep in house to ensure that I can keep control? (Role: human resources).
"Business is IT, IT is business" is a well-worn expression, but it is time we put it into practice. IT service providers support a wider, more complex area of business than ever before. There are few areas of any organisation that are not affected by technology or information.

The IT director must adopt an independent role and go for best-of-breed, rather than just asking, "Who shall I outsource to?" Internal staff, so often not considered, must be in the frame.

The answer may well be to enter into a supplier partnership, perhaps to allow for growth in demand, or to outsource on a modular basis.

IT leaders must shake off the technology tag and adopt a role as masters of change within their organisations.

So-called business people will scoff at that statement, arguing that the company must set its business goals first and IT must meet these needs. Those days are fast disappearing, as technology-driven change becomes the norm.

Strategic skills are spread across all areas of IT to differing depths and among different people. It is not unusual to have someone who is skilled in both NT and SAS, for example.

Skills that are crucial to business advantage should be present in-house. IT departments need to retain control and strategic ownership, even if large areas are outsourced. They cannot do this if all their knowledge has been farmed out.

Traditional methods of reaching sourcing decisions are now out-of-date, and do not meet the needs, challenges and demands of the future.

To survive and thrive, IT departments must drive the future of their organisations. To achieve this, leaders should source decisions on a considered, independent and modular basis that has little to do with the latest trends, and everything to do with best business practices.

David Taylor is president of IT directors' association Certus

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