CIO Symmetry

Jun 7 2011   4:30PM GMT

Outsourcing services need the right mix of commodity and strategy

Scot Petersen Scot Petersen Profile: Scot Petersen

Discover Card has made a celebrity out of “Peggy,” but despite the credit card provider’s efforts to humorously discredit outsourcing services in former Soviet Bloc countries, Ukraine is seeing steady growth in software outsourcing services, according to our sister publication in the United Kingdom,

CW reports that the Ukrainian Hi-Tech Initiative, an outsourcing software development alliance, estimates that the country’s outsourcing industry grew 20% in 2010, and that Ukraine employs more than 18,000 IT specialists, up 2,400 over last year. To CW’s U.K. readers, Ukraine is now a new “nearshoring” hot spot, over countries like India, which is more than 3,000 miles further east.

Closer to home, in-country outsourcing is the preferred resource for insurance provider PURE, which is fueling growth through a “selective outsourcing” strategy that puts its security email delivery services for policy holder communication in the hands of OneShield and Striata, and to M5 Networks for its telecom services.

Whatever the services or wherever they are based, PURE CIO Stuart Tainsky has the right approach: Any IT function or service that has become commoditized should be outsourced; anything strategic or essential to business requirements stays in-house. That’s because “our people will know the business more than our vendor will,” he said.

It seems outsourcing has finally grown up. Gone are the days of wholesale outsourcing and then lamenting the decision. Happy times.

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