Strategic outsourcing and IT vendor management best practices for CIOs

Strategic outsourcing and vendor management guide

Enterprise CIOs are adopting strategic outsourcing and IT vendor management best practices that differentiate the organization.

Strategic outsourcing has become commonplace in IT shops during the past 20 years, due to the promises of cost savings and IT efficiency. Moreover, enterprises are establishing strategies centered around IT vendor management best practices to ensure that their balance of offshoring, onshoring, insourcing, rightsourcing -- you name it, they've tried it -- properly suits organizational goals.

The responsibility for the outcome of the strategic outsourcing of IT usually lies with the organization's CIO, who must decide which IT functions can be safely outsourced, and then establishes and oversees the IT vendor management best practices that will ensure that the relationship works.

This guide is part of’s CIO Briefings series, which is designed to give IT leaders strategic management and decision-making advice on timely topics.

Table of contents:

Think strategically about outsourcing and vendor management

"The older and more bitter I become, the more it seems to me that much of my success as an IT leader depends on my being able to pick the right battles, and then win them," says CIO Niel Nickolaisen. "It's nearly impossible for me to do everything that the CIO role requires. That means I have to be selective about what I take on and where I focus my team's efforts.

"Done correctly, outsourcing will help me pick the right battles and win them. Done poorly, outsourcing will be a battle that I will always lose," Nickolaisen says."Given the importance of outsourcing as an IT strategy, how can we do it correctly?"

Read more from Nickolaisen in "In choosing the right model for outsourcing, consider three factors."

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Techniques for successful IT vendor management

Michael Saitow doesn't need a lesson in vendor relationship management. The CIO of M.S. Walker Inc., a wholesale wine and spirits distributor based in Somerville, Mass., meets at least monthly with his core systems vendors. "We talk about what to pull the trigger on next and about new initiatives," Saitow said.

When a new customer relationship management system is brought in, for example, Saitow said he plans to be around during the configuration and meet with his vendor over dinner that evening to review the project plan.

Read more in "What CIOs don't know about vendor relationship management can hurt."

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Strategic outsourcing comes in many flavors

Jessica Carroll, managing director of IT at the United States Golf Association, realizes some people might have thought she'd lost her mind when she chose to outsource disaster recovery to an IBM cloud solution, given the mission-critical nature of DR and pervasive industry trepidation over cloud security. In fact, however, a great deal of thought, planning and security consideration had gone into the decision. Bottom line: It was the best option for the organization.

"We have used the cloud for a number of initiatives," Carroll said. "Disaster recovery with IBM is absolutely one of our strongest solutions, but we also have CRM [customer relationship management] in the cloud, and infrastructure in the cloud for some of our public-facing environments."

Read more in "IT leaders embrace cloud solutions based on economic, business sense."

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Are you smart about strategic outsourcing?

Outsourcing and vendor management activities are evolving this year as CIOs consider offshoring, domestic outsourcing, insourcing and other approaches aimed at a strong, enterprise-wide strategy.

Are strategic outsourcing and vendor management best practices your strong suit? Find out by taking our quiz.

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