IT's competitive value loses in perception stakes

With the crunch on IT departments and the spectre of outsourcing hovering on the horizon, IT professionals are being warned they need to prove in-house IT shops are more competitive and customer focused than service providers.

The perception that in-house IT shops are not cost efficient, contestable and business oriented stems from IT's inability to put a value on its services, said David Stevenson, managing consultant for Compass Management Consulting.

"The reality in many organisations is that if a board gets a quote from someone to provide IT services, it wouldn't be able to evaluate whether the offer was a real number or not, and neither would the IT department.

"The issue that a lot of organisations face is that an outsourcer will say we will give you a desktop and then you get this and that, a complete definition of the service they provide, whereas an IT organisation will typically say 'OK, we will give you a machine, it costs X amount and then you need some networking'. Because it doesn't come across as a clear message, the end user thinks 'do you guys really know what you are doing'?"

Stevenson said this perspective could be resolved by the creation of an in-house IT services catalogue, not dissimilar to specifics outlined by outsourcers in their contracts.

However, Steve Tucker, IT manager for National Jet Systems Group, disagrees about the worth to users of a formal document of this sort.

"Our primary aim is to provide value to our end users and business units by delivering new solutions, better communications and collaboration tools. We like to remain flexible so that we can somewhat customise our delivery to users according to their requirements, within reason."

"I guess our modus operandi is 'if it's cost-effective to support, licensed and going to add value to the end user, then we will provide the service and will cost it to the business unit concerned; it is actually they who may make the final decision, we just provide the capability'," Tucker said.

Stevenson maintains that a service catalogue can give a better definition of the services that an IT organisation is providing to its end users. "All the things that users get and don't get, service levels, prices, how to order and get support, and upgrade options. A complete definition," said Stevenson"A lot of outsourcers can explain all the services they will provide as it is a contractual thing. However, a lot of internal IT organisations don't go through the same rigour they probably should."

Stevenson said if a services catalogue is in place, an organisation could then be confident that the contracting of an outsourcer would be a financially sound and strategic decision.

However, Stevenson recommends not getting caught up in the hype of outsourcing.

"There are probably more organisations out there where you would save money to stay in-house."

Stevenson said this is especially true in the client/server area. "Organisations tend to find that the internal costs of a client/server environment are more effective, and that partly comes about due to the hidden costs that you can get into."

Stevenson said savings in IT can be made by centralising processes such as procurement, and the selective outsourcing of data centres that have been around for several years.

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