CIO Relationships Limit Outsourcing Success

By | December 12, 2005

A nationwide survey has identified that chief information officers (CIOs) are in need of ‘relationship counseling’, to help them get the most from outsourcing. Most CIOs identified difficulty in managing relationships with partners as their biggest outsourcing headache.

The survey commissioned by Computacenter and carried out by PMP Research, questioned 100 CIOs from banking, pharmaceutical, manufacturing and the public sectors. The research identified that nearly 65 percent of private sector CIOs are working with a number of outsourcers simultaneously, making effective management even more of a priority. In contrast to this, less than half 45 percent of public sector organizations had more than one outsource partner.

Post-outsourcing, less than 7 percent of CIOs in the private sector had seen significant changes to their in-house skill set, whereas in the public sector the number experiencing a change was four times higher 28 percent. This may indicate that the public sector is developing relationship management abilities in its in-house teams, as well as giving them the opportunity to learn new skills in support of their core businesses.

Simon Walsh, managing director of services, Computacenter said: “CIOs tell us that outsourcing is helping them reduce costs, but they know it can also achieve more strategic objectives. CIOs can tap into a scalable pool of specialist resource to free up the time of their in-house staff. But to get the best out of their outsourcing partners they need to train retained employees in business planning and relationship management skills.”

Despite these challenges, the benefits of a well-managed outsourcing contract are clearly compelling. The survey found that in the next two years, 88 percent of CIOs will maintain or increase spending on outsourcing. CIOs stated that the most important reasons for choosing to outsource are to reduce operational costs (69%), focus on core business (59%) and gain access to specialist IT skills (54%).

“CIOs are looking for their teams to manage the overlaps and interfaces of multi-vendor relationships effectively. It is only those organisations that do get it right who will get the most out of outsourcing,” said Ben Booth, MORI CIO.

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