IT vs. Outsourcing

Don't you just love the 2004 election campaign advertisements where the presidential candidates start taking potshots at each other? It makes an election year seem really long when the public is subjected to extended negative campaigns during the process of helping us all decide where to place our vote. However, these ads have gotten me thinking - what if the IT department in your organization was up for re-election this year? As incumbent, would IT get the job? Or, would the challenger - Outsourcing - get elected? If IT was forced to make a public case for its continued existence as a part of the organization, what would its platform be?

In some cases, perhaps IT has been too complacent. "Hey, we have the job now. We're the business' partner. Our people sit with their people every day. The company wouldn't dare vote in Outsourcing. Or would they?" Complacency may work for a while, but eventually the "pull" to consider Outsourcing may increase to the point where the business calls for an election.

IT could try to make its campaign based on responsiveness to the business. I can see the ads now. "Outsourcing couldn't possibly be as responsive as we are to your technology needs. IT is your partner. We understand you and know what you need. You already know us and trust us - Don't you?" Or, IT may begin a more nasty, vicious campaign aiming to discredit the other candidate, Outsourcing. "Outsourcing will take U.S. IT jobs offshore, resulting in fewer jobs here at home. You wouldn't want to support the loss of U.S. jobs, would you?"

Of course, Outsourcing would counter with, "U.S. IT shops can't even compete on price, or quality either, for that matter! If you want it done at a lower cost, done right and done quickly, elect Outsourcing! As for the loss of U.S. jobs, that may indeed happen, but it's like water seeking its own level - if it's cheaper to do offshore, the business will flow there."

It is a fact that offshore Out-sourcing, where less costly labor pools can be utilized, is less expensive. An opportunity to cut costs is a powerful business motivator and could definitely win some votes. To counteract the allure of dramatically reduced costs, perhaps IT should tell the business exactly how it would control costs for the organization. The business has been asking why it takes more and more technology spending each year to obtain the same service levels when hardware and other costs are coming down. Where is all the money going? How will IT prove it can enhance security, provide an on-demand computing environment, ensure business continuity, improve application systems and improve support levels at a lesser cost? IT will have to prove it can do more for less money (something IT is not accustomed to doing!).

Meanwhile, Outsourcing will be developing its own campaign platform to win the business. With one plank of the platform being cost savings, Outsourcing may promise that service level agreements can even be put in place that actually provide pricing waivers if certain levels are not met. Imagine IT, with its relatively high fixed cost basis, trying to reply to that in its campaign ads!

As for partnership with the business, Outsourcing may claim it can be an even better partner than IT, because it will be financially motivated to do so. For Outsourcing to remain viable as a business, its business model must be financially sound. Unlike a captive IT department which gets funded each year as part of the company's overall budget, Outsourcing must win its contract and prove that it can meet or exceed expectations. If it doesn't, the business could go elsewhere.

What if IT really were up for re-election against Outsourcing in 2004? Which candidate would win in your organization? The election would essentially come down to a business question: Who can do information technology better, faster and cheaper? The incumbent IT would need to make a case that it can not only be a good partner who will listen to the business and respond with better service, but that it can also do it faster and cheaper. Offshore Outsourcing has some inherent advantages that IT would be wise to address head-on, which may make their election campaigns just as juicy as the presidential ones we are witnessing in U.S. politics!

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