Article

Gartner: Smart CIOs craft outsourcing plans with care

Ed Parry, SearchCIO.com News Editor

Bon voyage.

According to a new report from Gartner Inc., one out of every 10 jobs at U.S.-based IT companies and service providers is headed offshore by the end of 2004.

On a broader scale, the Stamford, Conn.-based research firm also claims that one out of every 20 IT jobs at firms that buy IT systems in the U.S. will be shipped out in the same period.

When those jobs head overseas, your company could be in for some rough sailing on the home front. And the way you handle the transition could help define you as an executive and your company as an employer.

It's a matter of taking the good with the bad. Gartner claims that cost, quality, value and process advantage are the proven upsides of offshoring. But the downsides can be the losses of future talent, intellectual assets and enterprise performance.

CIOs and business execs need to team up before the passports get stamped to make sure the offshore transition doesn't become disruptive and have a negative impact on the company's performance or the morale of employees. Gartner has offered some ideas on how high-level execs can prepare their employees for the bandwagon that may be sailing across the ocean with their jobs.

First, pinpoint the competencies, roles, people and knowledge that you want to keep in house. Gartner analysts say that many enterprises do not offshore critical positions such as those involving application design, application

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integration, client-facing process management, enterprise architecture, information management and high-investment competency centers. They also develop new competencies in service management, vendor relationship management, process management and business integration.

Second, it's important to nail down a transition plan with specifics. Make sure the plan has timelines and milestones clearly spelled out, so employees know what to expect from the offshore outsourcing deal and when to expect it -- nothing out of left field. When a milestone arrives, some segments will complete their transfer overseas, and the affected employees will be handed either their pink slips or different jobs. Gartner says that the latter option is the usual choice for companies committed to their employees.

Third, it's important to tell an employee what the options are. Whether it's retraining, another assignment, a pink slip or outplacement, execs need to spell out the options with clarity and sincerity.

"CIOs need to communicate clearly, honestly and respectfully about the transition plan, and about the options available to affected employees," said Gartner vice president and research director Diane Morello in a statement.

"The way in which enterprises deal with employees during the offshore transition will be [a] lasting testament to the perception of leadership and the reputation of the company as an employer."

That said, don't forget to make sure what you're getting offshore is worth what you're losing onshore.

Jeff Kaplan, managing director of Wellesley, Mass.-based ThinkStrategies, brought up a pair of considerations not mentioned in Gartner's report.

He said, in an e-mail to SearchCIO.com, that it's important to keep in mind "relationship management, to assure the quality of the offshore outsourcing service, and the technical infrastructure, to ensure that the outsourced services can be 'seamlessly' integrated into the client's ongoing operations."

FOR MORE INFORMATION:

Best Web Links on offshore outsourcing

Stories from Gartner's Outsourcing Summit 2003

Ask Jeff Kaplan a question about outsourcing


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