outsourced

A new outlet for outsourcing

Tue, 19 Feb 2008 06:59:59 -0500

Companies are looking for new ways to save money, and they may have found it: running data centers remotely. The reason is simple. As hardware prices fall, labor takes on a larger share of the costs. Companies must cut staff to save labor costs, according to the consulting firm, McKinsey. And it will lead to a big growth in one little-used outsourcing arena.

In McKinsey's 2006 survey, CIOs said that just 10 percent of their infrastructure roles could be off-shored. In 2007, that number rose to 27 percent. The report, sponsored by the India IT industry association Nasscom, estimates that at least 70 percent of infrastructure roles could ultimately be outsourced. McKinsey said there could be 325,000 jobs in India for infrastructure outsourcing. And that means that some work previously done domestically could disappear. Is this something you would consider? Let us know what you think about this leap-of-faith for outsourcing.

For more on this upcoming trend:
- See this InformationWeek article

Offshore outsourcing may be on the decline

Mon, 17 Dec 2007 06:59:59 -0500

Has the wind been taken out of the sails for overseas outsourcing? Probably not. But there are plenty of cautionary tales about the changing terrain of getting things done cheaply abroad. The first issue is the value of the Dollar, which is definitely heading downward worldwide. As a result, the value of India's currency, the Rupee, has been going up, making the cost of outsourcing a more expensive item on your bottom line. In addition, employee turnover continues to rise and skilled labor shortages are beginning to surface offshore.

What does this mean to an American-based business looking for ways to cut IT costs? It means plenty, and it underscores the necessity to shop for the best value for everything you need. "We are seeing both offshored and outsourced initiatives coming back," said Scott Lever, a managing consultant in PA Consulting Group's IT Consulting practice. J.P. Morgan recently terminated a $5 billion deal for offshore work. And that may just be the beginning of a shift that might be emerging in the tech market. "There now is more likelihood than we have seen in 10 years of work being insourced," said Max Staines, the North American managing director for consulting firm, Compass. "It is still relatively rare to see whole, big outsourcing functions return home," said Graham Pascoe, an outsourcing expert with PwC in London. A 2008 trend just may be the return of smaller functions that perform better within arm's reach. "We are seeing a lot more maturity about outsourcing," said Pascoe. "That's what is driving this."

For more on the perils of offshore outsourcing:
- Check out this CIOUpdate Article

How one CIO manages change

Mon, 03 Dec 2007 06:59:57 -0500

Every CIO wants to save money, and that has given a big boost to outsourcing. Craig Lee, CIO of Honolulu-based American Savings Bank, outsourced key banking applications at his facility, which has $6.7 billion in assets. His biggest problem was finding a way to cut costs in a location that is bounded by water and not growing. And his answer was outsourcing key banking applications. It was a tough challenge for a bank which was moving from a savings and loan institution to a full-service commercial bank with 65 branches. Lee became the CIO at the institution in 2001. And what he found was a decentralized IT operation. "Some of the controls you'd expect weren't there. We needed firewalls and new technology like email to bring us into the 21st century." Read Lee's interview for insights on how one CIO is managing change.

Fore more on bringing an operation into the 21st century:
- See this SearchCIO.com Article

Best Buy settles age discrimination lawsuit

Wed, 27 Jun 2007 20:01:39 -0400

Best Buy recently settled an age discrimination lawsuit filed in 2004 by 44 former IT workers who had been laid off, most of them after the electronics retailer outsourced its IT operations to Accenture earlier that year. The lawsuit was filed in connection with layoffs that took place in June 2004, two months after Best Buy announced its deal with Accenture, and with a smaller round of IT job cuts made in October 2003. When the outsourcing deal was announced, Best Buy told its 820 IT workers that only about 40 of them would remain with the retailer. About 650 others were expected to be shifted to Accenture and continue working at Best Buy's offices, while the remaining 130 or so workers were told their jobs would be eliminated. The lawsuit alleged that Best Buy laid off older IT workers in favor of retaining younger ones. The laid-off employees who became plaintiffs in the suit ranged in age from 40 to 71, with an average age of 51.

To get more:
- check out the article

Strong leadership makes a difference with outsourcing

Mon, 30 Apr 2007 20:01:36 -0400

Outsourcing makes strong IT leadership even more critical. Strong leadership means blending resources, optimizing performance and customer service and making IT more agile by overcoming barriers like cumbersome outsourcing agreements and time-consuming processes. It also means being able to quickly address and resolve problems and preparing for insourcing. After all, what gets outsourced usually gets insourced again several years later. And even if an organization never insources any of its outsourced functions, it will benefit by being prepared to insource. If you maintain at least the perception that insourcing is an option, you will have extra leverage.

Read more about the importance of strong leadership in outsourcing:
- read the article at ComputerWorld

Don't ignore security in outsourcing processes

Thu, 17 Aug 2006 20:01:35 -0400

There are many reasons why more and more enterprises are migrating to software-as-a service: cutting costs, reducing the number of non-critical tech tasks, streamlining business processes. But handing off the work doesn't necessarily mean that you're handing off the security aspect of the business process as well and in fact, experts say that organizations who outsource need to place more focus on security given the risk to data. A good first step is to ask your provider tough questions regarding their security practices and get some insight on what security issues they've had in the past. That way, there's no reason why you can't incorporate security needs into the service level agreement that gets put in place.

For more on securing outsourced processes:
-read this article at BPM Today

PLUS: The good and the bad in outsourcing business processes. Article

Accenture advances IT and lowers tech cost

Sun, 04 Jun 2006 20:01:36 -0400

Describing the IT effort at Accenture--one of the industry's leading consulting and outsourcing firms-- as dynamic doesn't quite do justice to how the company is running IT these days. As CIO Frank Modruson relates, the company has nearly doubled its staff in five years and added four billion to its revenue bottom line, yet has cut IT costs by 30 percent by developing standardized processes such as new hire integration and mobile worker location systems. You might also be surprised to learn how much of its own internal tech work is being outsourced.

For more on Accenture IT strategy:
- read this article at Forbes.com

ALSO NOTED: Why tech titans are eying Vietnam; Microsoft takes nagging approach in anti-piracy effort; and much more...

Tue, 25 Apr 2006 20:00:50 -0400

> Why tech titans are eying Vietnam these days. Article

> Microsoft takes a nagging approach in anti-piracy effort. Article

> A high-tech approach to keeping state transportation dollars strong. Article

> Minimizing the risks and vulnerabilities in going open source. Article

> Compensation benefits now available to outsourced tech staffers. Article

> Florida city hungry to pull wireless network on-board. Article

And Finally... Relive ex-CEO McNealy's wisecracks. Video

The disconnect CIOs have in tech hiring

Thu, 30 Mar 2006 19:01:34 -0500

A new report illustrates today's disconnect between what tech leaders need in terms of in-house skills and their longtime traditional approach to outsourcing. While business and communication skills are constantly cited as required, CIOs turn around and hired young professionals who don't have those skills and focus on projects that should likely be outsourced for efficiency reasons. The Society for Information Management, which funded the study conducted by an academic research team, says IT leaders still need to find the right balance in building an internal skill set and handing off non-critical IT projects.

For more on the SIM report findings:
- read this article at CRN

CIO role not going away anytime soon

Sun, 19 Mar 2006 19:01:38 -0500

If you're starting to believe that the next job to be outsourced is the top role--the CIO job--one pundit wants you to stop that thinking immediately. As research data points out and trend analysis indicates, the job of CIO isn't going offshore, and if it is falling in stature it's only due to potential complacency by tech executives in some arenas.

For more on the potential of outsourcing CIO jobs:
- read this article at Optimize