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CIOs at forum talk up benefits of outsourcing -- on and offshore

Ed Parry, News Editor

ATLANTA -- A panel of five area CIOs added yet a few more opinions and experiences to the outsourcing and offshoring debate Tuesday at the fourth annual CIO Forum sponsored by the United Way of Metropolitan

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Ann Franks, vice president of information technology of Atlanta-based office products maker Lanier Worldwide Inc., outsourced some work for an Oracle enterprise resource planning (ERP) project to a firm with developers in India. The results, Franks said, were cost efficiency and speed; the developers finished the Oracle objects well in advance of the scheduled ERP launch next spring.

Where the work was done was not an issue to her. "We want to take advantage of the best resources no matter the location," Franks said. She added that the term "outsourcing" is too often synonymous with offshoring and India. "Outsourcing could mean Iowa," she said.

Atlanta-based Delta Technology Inc., a subsidiary of Delta Airlines, outsources work to companies in its own backyard, as well as to companies in India and Ukraine. Brian Leinbach, senior vice president of development said now his firm is starting look into how outsourcing can expand Delta's ability to make the most of what global talent has to offer.

"We're starting to focus now on how to enable a virtual organization so providers can give us capabilities from wherever in the world," he said.

"[Outsourcing] has been the right answer for us," said Sandy Hofmann, CIO of Mapics Inc., an Alpharetta, Ga.-based maker of ERP and CRM products for manufacturers. She also takes advantage of providers across town as well as across the globe. Outsourcing a human resources information solution system to an Atlanta-area company -- and allowing them to manage employee information over their server -- has allowed Mapics' HR staff to focus on people rather than data, she said.

Outsourcing product development to programmers in India and the Philippines has helped the company respond to demands for cost-effective products.

"The quality was a surprise," Hofmann said. The key to that success, she said, was a well-defined business process and educating partners about that process. "It's absolutely critical when you're outsourcing," she said. "A lousy process done more cheaply by someone else is still lousy."

One thing about offshoring that worries Hofmann? Intellectual property rights, particularly in China. "We've got agreements in place in India for digital rights, but not China," she said. "I'm always nervous about what I will find when I examine the network there." China's software licensing laws aren't as robust nor are they as court-tested as India's, she said.

For other CIOs on the panel, offshoring doesn't make much sense.

"We can only grow by recruiting industry here," said Becky Blalock, CIO of Southern Co., a Fortune 200 energy firm based in Atlanta that services 120,000 square miles in four southeastern states. Southern's business is built on people moving into the company's service area, so sending jobs away is a bad business decision. "We're not a global company, " she added, "and it would be difficult for us to do business in a country where culturally we don't know how to operate."

The company does outsource some printer repair work but keeps that work in the area.

I'm more worried about education than outsourcing.
Sandy Hofmann
CIOMapics Inc.

"I'm not afraid to do it, but we do very little of it in the conventional sense," said Scott Hatfield, CIO of Atlanta-based Cox Communications Inc., a cable, high-speed Internet and phone service provider. Hatfield said his firm "sees the value of localism" and focuses on having employees in the cities it serves.

When it comes to the negative publicity over offshoring -- and the political flames it has fanned -- Franks thinks it's a case of deja vu that will blow over.

"I remember 30 years ago when there was a huge outcry over automating the back office and how that would displace workers," she said. "Looking back, it was really a reallocation of the workforce that created new jobs that we didn't see yet. The same thing will happen here, it's just more of an issue because of the economic downturn."

Hofmann just hopes the U.S. workers of tomorrow will be ready when those new jobs come.

"I'm more worried about education than outsourcing," she said.


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