Enterprise outsourcing and IT offshoring guide for CIOs

Enterprise outsourcing and IT offshoring guide for CIOs

CIOs are approaching their enterprise outsourcing and IT offshoring strategies with the lessons of the recession fresh in their minds. It is important to seek out an outsourcing provider that has a company culture in sync with your own, but be wary of locking yourself into long-term deals that limit your flexibility. Perhaps even consider insourcing infrastructure or application work that you previously outsourced.

In this guide, discover how other CIOs with extensive enterprise outsourcing and IT offshoring experience tackle such areas as building an outsourcing strategy, selecting and vetting outsourcing providers, integrating IT outsourcing into their organizations, and outsourcing specific pieces of the organization.

This guide is part of SearchCIO.com's CIO Briefings series, which is designed to give IT leaders strategic guidance and advice that addresses the management and decision-making aspects of timely topics. For a complete list of the topics covered to date, visit the CIO Briefings section.

Table of contents

  Building an enterprise outsourcing strategy
  Table of Contents

An outsourcing strategy rarely follows a single template. What is a core function for one company is a commodity service for another. The legacy application that is efficiently handled in-house by one IT department might for another be a nightmare worth dumping. Experts caution however, that the old wishful thinking about "outsourcing our mess for less" usually remains wishful thinking.

One thing holds true for most CIOs: It's prudent to get your outsourcing strategy as right as possible the first time, given that research shows you are unlikely to reverse any decision to outsource. In fact, when outsourcing contracts are up for renegotiation, companies end up staying with their current provider upwards of 70% of the time, according to Gartner Inc., even when performance or cost has been a problem. "The bias is to the incumbent," said Allie Young, research vice president and distinguished analyst in Gartner's technology and service provider group.

Here are six key questions that will help you build an effective outsourcing strategy.

Learn more in "Six questions for building an effective outsourcing strategy." Also:

  Selecting and vetting an outsourcing provider
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With companies getting squeezed by the worst recession in decades, recent spending on outsourcing has jumped. Among organizations that outsource some IT work, the percentage of total IT spending going to outsourcing service providers was 7.1% in 2010, according to Computer Economics Inc., an Irvine, Calif.-based advisory firm. That’s up from 6.1% in 2009 and 3.8% in 2008. If 2011 is anything like the past three years, selecting the right outsourcing service provider and getting an outsourcing contract off to a good start will be critical for many CIOs.

SearchCIO.com spoke with Steve Martin, partner at Tysons Corner, Va.-based outsourcing advisory firm Pace Harmon LLC, about mistakes CIOs often make when they choose an outsourcing service provider. A former partner at Deloitte Consulting, Martin has led more than 100 strategic outsourcing deals totaling $7 billion in products and services. Here are four mistakes your organization wants to avoid when it puts together its next IT outsourcing deal.

Learn more in "Picking an outsourcing service provider? Avoid these four mistakes." Also:

  Making IT outsourcing work for your organization
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Arjun Sethi, head of the outsourcing practice at global management consulting firm A.T. Kearney Inc., believes the outsourcing industry is on the cusp of a sea change.

In this interview with SearchCIO.com, Sethi describes the momentum building behind a shift in outsourcing projects away from custom work and head-count labor to standardized, vertically integrated outsourcing solutions. Find out what this new world order looks like, the concessions CIOs will have to make and which outsourcing companies are poised for success -- or failure.

Learn more in "Customization is out, as CIOs seek standardized outsourcing solutions." Also:

  Outsourcing applications and other tactics
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While cloud computing dominates many outsourcing discussions, offshore providers are having a different conversation with their enterprise customers: mobility. As companies plot their post-recession strategies, they are showing a strong interest in using mobile business applications to gain a competitive edge in the marketplace or to optimize a critical business workflow.

"With the advent of PDAs and mobile devices, people are seeing that this is yet another way to get ahead of their competitors," said Sury Kant, president of New York-based Tata Consultancy Services (TCS) Ltd. North America.

Learn more in "Outsourcing trends: Mobile business applications for a business edge." Also:

  More resources
  Table of Contents

This was first published in February 2011

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