New ways of working

Computing Business 20 Nov 2008

IT chiefs need to adapt their management style if they are to flourish in an outsourcing environment.
It is no surprise that outsourcing changes the role of the chief information officer (CIO). What is often not appreciated is the speed of that change and how fundamental the impact is. The only option is to adapt; hiding behind the server is not an option as outsourcing is here to stay.
In whatever way an outsourcing project lands on the desk of the CIO, once there it will present many challenges and all being well, many business benefits. In order to succeed, the CIO must acknowledge that the change of pace will not be of their choosing. Furthermore, the CIO has to embrace this change, yet still deliver the services that they are accountable for. To meet these challenges, the CIO must change their priorities and their focus.
First, by changing from focusing on the “how” to the “what”. Traditionally, the imperative is to think about how to manage service delivery: How does IT support the business? What staff, software and hardware are needed and, more generally, how is the function kept running smoothly? Once a function or process is outsourced these are the responsibility of the service provider.
The CIO now has to be able to focus on exactly what the needs of the business are to ensure that the service provider delivers the right services.
Second, efficiency moves down the order of priorities to be replaced by effectiveness. Analysing the cost of services using data such as cost of IT per employee are now not the priority. After outsourcing, the CIO needs to understand what IT model is required to most effectively support internal customers. It’s unlikely to matter if the cost per employee for IT increases by 10 per cent if it allows employees to increase their productivity.
Finally, the CIO must develop their skills from that of a technology expert to a business expert. Although technology may be the stock-in-trade of the CIO, the new world dictates that a CIO must deliver technology solutions that are cognisant of business issues.
Making the change
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Most CIOs are used to dealing with local customers and suppliers. However, outsourcing also creates the prospect of working with offshore service providers. It raises questions such as: Which processes are most suited to being located offshore? Again, the CIO’s implementation approach must have the information to hand to make informed decisions based on a sound understanding of business needs beyond the IT department.
How these significant changes effect a CIO will vary from person to person, but it is clear that the role is likely to become more demanding and detached from core IT activity. However, CIOs may find that their role is now more interesting, higher profile and plays a more influential role in the business. CIOs should also not be surprised if these changes lead to a desire to take on broader, more business-focused roles within their organisation ­ perhaps even moving into a delivery role on an outsourcing contract.
No one likes change and so despite the benefits, it’s not unusual for outsourcing to be instinctively resisted by a CIO. However, the changes must be embraced, otherwise an outsourcing strategy will fail.
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So what’s next for the ever-resourceful CIO? They must develop the expertise to become increasingly valuable to the wider business. They must also develop a deep understanding of core business processes, risk management and an appreciation of how IT can differentiate the business offering and customer experience. The CIO must also be prepared to get involved in branding and marketing.
In summary, CIOs must be adaptable and capable of evolving their role. An ability to be able to interpret and deliver broad business strategy not just functional IT processes is needed, and fast.

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