Generate Revenue and Forget About Offshoring, Advises ex-CIO

CIO are good at cost management, but they often overlook IT's revenue generating potential, says former Welcome Pharmaceuticals and P&O Ports CIO Marco Tapia

PicNet managing director Marco Tapia

PicNet managing director Marco Tapia

A former CIO who now runs an Australian services firm has urged in-house IT staff to promote more revenue generating opportunities to help change the view of IT as solely a cost centre.

Marco Tapia was CIO of Welcome Pharmaceuticals for 10 years and then CIO of P&O Ports for 7 years before starting PicNet in 2001.

Tapia says CIOs tend to focus on cost, which makes them good at cost management, but they often overlook the revenue generating capability of IT departments for the wider business.

"CIOs are good at managing people and human resources -- and obviously IT -- but they need more skills in marketing, finance and business strategy," Tapia said. "The more contemporary CIOs are good at revenue generation."

According to Tapia, many CIOs struggle to "let technology go" and fail to build bridges with the revenue generating parts of the business.

Tapia now deals with CIOs from PicNet's market of companies in the 250 to 1000 seat range.

He classifies PicNet as a "tier 3 or 4" IT services provider and is looking to double its size over the next few years and branch out from its Sydney headquarters into other states.

Tapia says competition from Indian outsourcers has put pressure on the tier-1 providers, but believes the level of competition is fading and many companies are coming back from Indian providers to local mid-tier firms. "Large outsourcers tell customers what to do," Tapia said.

Tapia wrote a blog titled "Off shoring - Why bother?" with a list of reasons he believes offshoring is not as "cost saving" as people are led to believe.

On skills development, Tapia says it is "still extremely difficult to get good people".

"After the global financial crisis, if companies had to make redundancies it was not the best people they let go," he said.

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