The outsourcing story is gaining ground in India, and is now widely practiced. Many organizations now look at external sources to manage some of these services, and all have their own logic about what they have outsourced. There has perhaps been no study to assess whether outsourcing has really been able to deliver the results in each case, and whether the model adopted by them was the best one possible.
Some organizations believe in outsourcing routine repetitive activities like facilities management, data center management, and software development, but keep the high level tasks in-house. Others believe in strategic outsourcing, and involve high profile consultants as advisors to give directions while keeping the menial functions within their organization. So the outsourcing story is not uniform, and depends on the organization’s stated purposes.
The question is not whether to outsource or not, but of which IT functions to outsource. It is important to choose the right outsourcing model that is most suitable for the organization. Models of outsourcing vary; it could be a complete outsourcing of IT, with only the CIO being retained as a co-coordinator. We have seen such examples in MNC organizations; examples in the telecom sector and among big IT players do suggest such a route to the corporate. The other model is one of partial outsourcing where one or more IT functions are completely outsourced. Some of the best exampled include passing on of routine tasks like facilities management, help desk, data center management, software development, application support, or tasks like 24/7 security monitoring. This eases the CIO’s burden, and he can then concentrate on delivering value to business.
In some cases, outsourcing is initiated by the management when they feel that services delivered by the IT Department are not satisfactory—either due to low performance, or due to attrition. In the other cases that I have seen, CIOs take the lead and put up a proposal to the management with sufficient explanation citing better delivery and cost savings, besides other factors like making use of external skills and service level agreements (SLA). As CIOs, we have to seize the initiative.
Perhaps, outsourcing has become so common and easy to practice that I often wonder whether this topic is now too relevant to debate. I would love to hear from people who hold contrary views.
Today you are the CIO, but what next? Truth be told, this question may not have clear answers.
Views vary, and so do the aspiration levels of CIOs. For a person starting at the lower level, getting to a C-level position could be the ultimate destination. Some may hold ambitions of getting to the Board level, while some may be taken in by the rants of ‘Can the CIO become a CEO?’ discussed as a topic in various seminars.
I have met quite a few of my fellow CIOs who rose up from being CIOs to become CEOs (of their outfits spun off as separate companies). Out of these, some managed it very well; others did not. A couple of others took the courage of taking over charge of a software (or service) company as CEOs. Many CIOs are members of the management or executive committees, and play a part in organizational decision making. Maybe, it’s that only a few CIOs get to be Board members, and a very few get to the CEO level of large organizations. However, becoming the CEO stays an unfulfilled dream for many, perhaps more because of the widespread debate generated at various forums.
Well, a few our CIO friends may beg to differ about this pipe dream. They say that they would like to grow in stature, and be more meaningful to the organization, rather than chase such a dream. For them, becoming more powerful is about getting to a position of influence where they can alter the organizational course. They could become trusted advisors to the CEO; help the company grow and get to be more profitable through IT interventions and in bringing about business process improvements. They could one day become a CEO too, but that thought is not overbearing on them. Others feel that the goal of becoming a CEO limits their thinking, and takes them away from playing a larger role at the industry level. Some maybe considering research, or becoming a consultant of repute, or of coaching and teaching. These too are positions of significance in society.
So can we say that attaining one such stated positions mean the end of the road for a CIO? Or is there more that he can aim for? Is there too much hype on this subject (thereby confusing the CIOs), or do people initiate this talk just for discussion purposes. It may perhaps be important to really understand the CIO’s need to connect with what he wants to do in life, rather than trying to push him into a race that he is not too keen to enter?
The phrase “IT should talk the language of business”, often makes a lot of CIOs self conscious. At the same time, this prompts the CIO to make this transition. To be able to talk the right language, the CIO has first to learn the business of the company that he serves, understand the market, competitors, challenges that the business faces, and the hurdles to growth. Once he has this background, he can confidently engage in a conversation with the business heads to understand their pain points and aspirations for growth.
For instance, to understand business, the CIO can volunteer to make market visits to understand the market, dealers and customers. He can go around the Plant to understand the manufacturing process, visit procurement centers (if any), or read the company annual reports for the last few years to understand the business philosophy as well as growth patterns. It may be important to meet all the functional heads to understand their perspectives on business and their expectations from IT. Once the CIO understands these business imperatives and concerns, he will be in a position to strike a much more meaningful conversation.
Now what stops the CIO from doing so? Is it the absence of an MBA degree, or that he has never been taught these in his technical course in college? Or is it that his talking of business may shift his focus from the responsibility of managing the technical environment?
These are all matters that we should seriously ponder upon. Now, some of these issues may be genuine in their own way. Nothing stops the CIO from pursuing a MBA course and understanding various aspects of business and management. But that need not be the only route; he can also read articles, have discussions with learned professionals, or attend seminars. He can shrug off the past and learn things afresh, even if he has not had a business orientation earlier. However, if he chooses to stay within his technical domain and excel, then it’s his own choice.
I have met a large number of CIOs in the industry and talked about this subject. While quite a few of them are eager and make attempts, many others are shy or short on confidence. If they really want to take that jump, they could seek assistance from their seniors in the profession.
“IT’s alignment with business”. We often hear this line spoken in various group discussions and seminars. But what does this term really mean for CIOs?
Does it mean building rapport with management personnel, or making the right noises in the corridors of power? Does it mean ensuring that IT plans follow the short/medium term business plan (if there is one), or towards your role in providing assistance for various functions in meeting their yearly targets?
For many CIOs, IT’s alignment with business may mean prioritizing projects as agreed with business, or building capability of business to compete in the markets. For others, it could be all about envisioning new areas and opportunities that executives may not have put their thought to.
I was also confused over this aspect earlier, and tried to unravel its meaning. Till then, I had made some IT plans which only I understood (but not the CEO). It took me some time to understand why he wouldn’t comment on my plans. Later I struck gold, and I think now’s the time to share my experience.
When I was with an automobile company, making an IT plan used to look difficult in the early days. Application of IT used to be meager in those days, and users had very little faith in the IT setup. Now, the good part was that I was fortunate enough to be part of the management committee, and therefore privy to discussions on various business issues. I used that information to draw out the main business challenges, priorities and possible solutions—this caught the committee’s attention.
The main concerns at that time turned out to be our ability to manage tremendous growth targets over the next five years, management of material availability, production scheduling, scaling down inventory (while ensuring availability to production), management of working capital, and being in a position to optimize the supply chain. Definition of a few business drivers and a measure of quantification helped me convey the message and draw out an IT roadmap for the next three years. But this was just half the story, since the real test proved to be execution.
Truth be told, the journey was tough, and I often felt like giving up. However, successful implementation of various systems (including ERP) and realization of benefits by the business really caught the interest of various functions. IT was then moving along with business, and all those in power started participating.
Back to the present, we may often claim to have perfect alignment with business, but vendors complain of certain CIOs being rigid when it comes to being open to new solutions. Sometimes, we are apprehensive of talking about technology in certain forums—just due to the fear that others will take us to be pure techies, and not real CIOs.
It sure is a dilemma, but is there a way out?