CIOs must revaluate use of outsourcing: Gartner

CIOs must revaluate their use of outsourcing and move from the role of IT manager to broker if effective resourcing is to take place, a Gartner analyst has warned.

In Sydney for the Gartner Symposium, analyst Linda Cohen spoke to CIO Australia and said the idea that outsourcing is a problem solver is not always the case.

“We ask our CIO clients to consider outsourcing as an operating strategy rather than a problem solver,” she said. “Historically, outsourcing has been a bandaid and a way to fix the problem.”

Cohen said another misconception CIOs may have about outsourcing is that it will save the business money over a period of time.

“The number one reason they choose to outsource is this theory that they can lower their costs... honestly, history tells us the act of outsourcing doesn’t save money,” Cohen said. “The real problem is how do you sustain the lower cost to operate?”

Developing a clear strategy around not only IT requirements but business requirements is an important CIO consideration, according to Cohen.

“The number one thing they have to do is bother to align, literally,” she said. “First of all bother to have a strategy, bother to sit down with the business operators…and plan for the way you will resource moving forward IT that that business needs.”

With recent suggestions that outsourcing problems are being caused by middle management, Cohen said a shift in strategy around outsourcing will see the role of the CIO change slightly.

“The CIOs new role is to go and find the new technology for the business,” she said. “The supplier of IT to the business, not the manager of IT to the business.”

Cohen’s top tips for CIOs looking to outsource included:

Take control of your outsourced technology

“We’re telling our CIO clients that its really time to take control of sourcing as a strategic endeavour,” she said. “We are not going back to a time where we did everything inside, so the CIOs have to become more savvy for standing for and utilising an outsourcing strategy.”

Avoid ‘old fashioned’ SLAs

“The old fashioned structure of these deals created service level agreements that were all about the underlying technology and how it operates,” she said. “That’s the real problem here, we lock ourselves into historic technology architectures.”

Avoid vendor lock-in

“The new method of service delivery is like a utility style service,” Cohen said. “The way the vendor operates creates the capability is their factory, their way, in their preferred location.”

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