Friday, December 14, 2012


Another CIO worst practice for Business/IT alignment

It goes without saying that many enterprises are taking advantage of global IT outsourcing trends in hopes of reducing IT labor costs. Many organizations have procurement practices that are thorough in maximizing labor abritage but otherwise fail in reducing cost over a longer time horizon. More importantly, their approaches to outsourcing tend to increase the misalignment of vendors you work with.

Whenever a CIO creates an organization where the majority of IT staff aren't employees, it becomes equally important to focus on the need for business-aligned sourcing. Which sourcing vendor feels more aligned to you? An approach frequently used by Cognizant where they put account teams onsite that do nothing but walk the hallways asking your IT team their staffing needs without any form of ownership to outcome or the model used by firms such as HP and IBM that take a longer-term view by focusing less on staff augmentation and more on managed services.

In order to get business-aligned sourcing right, we need to turn most outsourcing decisions upside down. Let's start by analyzing enterprise behavior and understand where things go wrong...

CEO: We need to save more money. Outsource more!

CFO: I mandate outsourcing at every possible opportunity (even with it is boneheaded to do so) to cut costs

CFO: I have advised those lovely folks in procurement to review outsourcing bids and select the low-cost provider.

CIO: We are already thin on subject matter expertise and outsourcing will jeopardize our ability to support the business

CFO: I don't care about the business, but I do care about costs. Find a way to get the business to accept the lower quality that India outsourcing firms deliver and no you can't use higher quality firms such as HP or IBM

CIO: As my talent walks out the door, I am left with those who can't find jobs elsewhere. Besides, I want my bonus so I better focus on whats in it for me and let everyone worry about their own fate. Maybe I need to hide the activity under the banner of leadership

CTO: Hey CIO, WTF! the availability of our systems has decreased 10X since bringing on Cognizant and Infosys! The Business: How come I don't get the same level of quality that I did before?

CIO: Business customer, we have brought you losts of cost savings that you can use for invest projects. Don't worry about production uptime. The experience you are suffering is attributable to transition

CIO: This Indian outsourcing thing is going to cause me to lose my job. After outsourcing I realize that critical skills are lacking.

Outsourcing Sales Guy:Don't worry, CIO we got lots of people who can walk the hallway and solicit your directs for job reqs. We are really good in placing butts in seats!

CIO: If outsourcing isn't working well for us, the simple answer is to outsource more!

CEO: Our biggest competitor has outsourced, I should rally the team and frantically ask Why aren't we outsourcing more?

CIO: I will further reduce head count and lower costs. We need to go offshore for service delivery — now!

Does this conversation feel somewhat familiar to you? Does this feel business-aligned? Do you know that there are better ways...

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