Sunday Aug 22, 2004

The Outsourcing epidemic; the saga continues ..

These days it seems that everyone considers outsourcing actually believing it will solve all business 'problems'. And every time I get to read articles, rants, reviews, stories and the likes there are always the financial advisor (or the likes) and someone who have no clue what technology actually is who actually drives the dash for outsourcing. Most often the argument is to reduce IT cost and bring better 'service quality' to the enterprise. "Bring technology under business control" I keep hearing. The principle is good. The motivation too, but what is most often missed is the indirect values of keeping IT internal rather than doing outsourcing all the way. Don't be mislead; I do think that outsourcing, in the ideal sitation, could be a good move - BUT - it should be the end result of a looong business and IT alignment - and NOT thought of as a quick-fix for "all your business driven IT needs". That last road bears a great chance of failing and in the long run induce greater IT operating expenses to the organisation.

So; what is the right way? I guess no one could actually be precise since every organisation is different, but one thing is constant. When even considering any type of sourcing it is evident that the organisation should have a clear cut and defined view on how IT and the business relates and align to eachother. Without having this clearly defined ANY type of sourcing will carry (to me) an intolerable risk of failing. In my head (out)sourcing is as such a good thing after actually have implemented a Service Management 'regime' within the organiasation. ITIL as a framework is a really good example. Through aligning and defining the IT organisations offerings, revising them and creating a process driven datacenter you carry a really good chance of being successful and delivering substantial IT cost reductions.

On the other hand; you might even find that your IT organisation now actually have delivered "on it's promises" and it is delivering the business benefits sought by the (financial) management responsible within the organisation. There are a number of examples and stories that this carries some truth. After re-defining/inventing the way IT supports the business and it's drivers; the IT organisation and the business as a whole end up being closey aligned. Why then consider breaking them when the understanding of the business as a whole is at it's greatest??? For some this does not make sense (in my head too!). The problem with this "idea scenario" is of course that implementing and driving Service Management initiatives is hard; really hard. If successful though, there is no greater weapon available!!

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