Generate Revenue and Forget About Offshoring, Advises ex-CIO
- 09 December, 2009 10:31
- Comments 3
PicNet managing director Marco Tapia
A former CIO who now runs an Australian services firm has urged in-house IT staff to promote more revenue generating opportunities to help change the view of IT as solely a cost centre.
Marco Tapia was CIO of Welcome Pharmaceuticals for 10 years and then CIO of P&O Ports for 7 years before starting PicNet in 2001.
Tapia says CIOs tend to focus on cost, which makes them good at cost management, but they often overlook the revenue generating capability of IT departments for the wider business.
"CIOs are good at managing people and human resources -- and obviously IT -- but they need more skills in marketing, finance and business strategy," Tapia said. "The more contemporary CIOs are good at revenue generation."
According to Tapia, many CIOs struggle to "let technology go" and fail to build bridges with the revenue generating parts of the business.
Tapia now deals with CIOs from PicNet's market of companies in the 250 to 1000 seat range.
He classifies PicNet as a "tier 3 or 4" IT services provider and is looking to double its size over the next few years and branch out from its Sydney headquarters into other states.
Tapia says competition from Indian outsourcers has put pressure on the tier-1 providers, but believes the level of competition is fading and many companies are coming back from Indian providers to local mid-tier firms. "Large outsourcers tell customers what to do," Tapia said.
Tapia wrote a blog titled "Off shoring - Why bother?" with a list of reasons he believes offshoring is not as "cost saving" as people are led to believe.
On skills development, Tapia says it is "still extremely difficult to get good people".
"After the global financial crisis, if companies had to make redundancies it was not the best people they let go," he said.
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Comments
Anonymous
I totally agree with Marco, that CIOs focus on revenue (too)
Marco, I totally agree with you. I was GM IT and later COO running both IT and a 200 seat call centre, I worked hard to make the call centre price competitive and keep it local (Aust)..and it still is local. And yes cost savings are important, but no one loses their jobs when revenue targets are hit & exceeded, so driving revenue from my call centre was critical, and making sure all IT support systems support revenue generation is critical. I've preached the same for years too. rgds, Frank
Phil
Excellent comments
I totally agree with Marco's comments. I recently spoke with a senior exec at one firm that was getting pushed to offshoring. The comment was made that the only reason for doing it was pressure from external analysts on the share price. It would seem that if your firm is not offshoring then you will get poor research reports and hence hurt your value. All sounds very artificial.
Here are some of my thoughts on the issue that I blogged earlier this year:
http://anyport.blogspot.com/2009/01/why-offshore.html
Sean Chamberlin
the key is strategy alignment
It's great to hear Marco's comments as they help to restore the focus back on the main purpose of IT (and hence any CIO) which is to help the Business achieve their objectives. ie. aligning IT work with the Business Plan. Cost minimisation and regulatory conformance are important too but all decision making needs to be validated against the question "how does this help the company achieve it's objectives". By focusing on revenue generation IT can be seen as a value-add group rather than a cost centre. Good article.
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