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.
- Building an enterprise outsourcing strategy
- Selecting and vetting an outsourcing provider
- Making IT outsourcing work for your organization
- Outsourcing applications and other tactics
- More resources
| Building an enterprise outsourcing strategy
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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:
- IT outsourcing strategy FAQ: Getting started on onshoring, offshoring
An IT outsourcing strategy is crucial to enterprises looking to cut costs and globalize operations during a recession. In this guide, learn how to get started with IT outsourcing.
- 9 IT outsourcing myths, and the outsourcing facts CIOs should consider
Deloitte LLP's CIO shares nine global outsourcing myths, and accompanying outsourcing facts that CIOs should consider.
- Free IT outsourcing templates: SLAs, RFPs and more
CIOs pursuing IT outsourcing deals can benefit from templates spelling out best practices for service-level agreements and requests for proposals. Get links to some free IT outsourcing templates.
- How to build IT innovation, flexibility into your IT outsourcing deals
Learn how to draw IT innovation from your IT outsourcing vendors and structure your contracts to cover new technology models, such as cloud computing and Software as a Service.
| 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:
- A dozen danger signs that your outsourcing contract is on the rocks
Outsourcing contract renegotiations were up sharply last year. Most of that activity focused on cost reductions. Experts offer their advice, in this first of two articles.
- Signs that your outsourcing contract is on the rocks, part 2
What are the warning signs that outsourcing contracts are going bad? How can you mitigate the risks? Experts offer advice in this second of two articles.
- Google in China: Drawing lessons for your IT outsourcing plan
Google's decision to stop cooperating with Chinese government censors raises questions regarding U.S. businesses' IT outsourcing plans.
- Pros and cons of IT outsourcing in popular Asian countries
The benefits and challenges of IT outsourcing in India, China, the Philippines and Vietnam range from pricing to intellectual property barriers. Learn more here.
- IT outsourcing pros and cons for Latin, South America
IT outsourcing pros and cons for Latin America and South America range from time zone alignment and geographic proximity to a lack of vendors and communication barriers due to language differences. Learn more here.
| 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:
- Does IT chargeback pave the way to outsourcing?
IT chargeback and the supply-and-demand model for IT impose fiscal discipline on business spending on technology. But do they lead to outsourcing?
- Is it better to work for an outsourcing provider than for corporate IT?
A veteran consultant says he sleeps at night because he knows that the corporate IT employees he's told to fire are better off working for an outsourcing provider.
- Managing application development outsourcing risks
Application development outsourcing poses risks, from developers sharing information on blogs to not knowing who is really writing your code. Here's how to manage them.
| 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:
- Outsourcing trends: Waiting on cloud, CIOs eye two-tier ERP model
As CIOs wait for public-cloud offerings to mature, they look to offshore providers for services that confer competitive advantage. First up: a two-tier ERP or hub-and-spoke model.
- Solid governance model key to IT outsourcing contract success
A solid governance model and a relationship-minded manager are crucial to the success of an IT outsourcing contract. Here's what to look for.
- IT insourcing can bring jobs, cost savings back in-house, experts say
IT insourcing is on the rise as companies terminate IT outsourcing contracts or let them expire. Here's why, and whether it might work for you.
- Outsourcing and offshoring in a recession more flexible, panelists say
Outsourcing and offshoring activities in a recession thrive on flexibility from both clients and providers.
| More resources
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