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The Real(time) McCoy

The Real(time) McCoy

You'd expect chairman and CEO Michael Fleisher to lob into town for the local version of Garter's Symposium/ITexpo.

And he was there in force, kicking off the first-day keynote, meeting with a covey of clients and going "one-on-one" in the advisory sessions, all of which left him a bit hoarse, but no less vocal, during an interview with CIO - one of a handful he gave during his visit. It's de rigueur to label this type of interview as "frank and wide-ranging". While it's a little hard to do "wide-ranging" when the clock is ticking down on 30 minutes, "frank" is certainly apropos here. After all, these days if your interviewee starts talking about CEOs being led away in handcuffs, you've got to admit they're being candid.

CIO: You meet with a lot of C-level executives - CFOs, CEOs, CIOs, and so forth. Taking them one at a time, let's start with CEOs. What would you say is the most common question CEOs ask you?

Michael Fleisher: The first question that every CEO asks me, which is kind of like the CEO handshake these days, is: "How's business?" Every CEO that meets another CEO asks: "How's business? How are you seeing things? What's going on in the economy? Where is the world headed?"

On a technology level, I think they're all trying to figure out how they should think about technology investment. It's not so much should they be making investments, because they all know IT is strategically important to them now. It's really a question of: "I don't want to be overspending because I am very earnings conscious, so how do I make the right calls?"

That is what's front and centre right now.

My sense of CEOs is that they are being very cautious about their resources because they are very focused on making earnings in a tough revenue environment, so they look at any investment and say: Â'I have got to allocate resources the right way.' CEOs know that they have precious few resources and they really want to maximise them. They know technology is important but they still struggle with understanding what the business value is - what is the return?

So what's happening is a much more serious discussion between CEOs and CIOs, one that says: "What's the real return we're going to get on this? What's the real business value? Show me the business value. Show me the business units telling you that we must have this in order for me to make this investment.

CIO: What about CFOs? What is their most common question?

Michael Fleisher: "What can I outsource? And how much money can I save doing it?" Those are questions that I love getting because I don't think that most outsourcing leads to giant savings.

CIO: But cost saving remains a persistent - if mistaken - sentiment.

Michael Fleisher: The vast majority of outsourcing today is still done by companies that think they are going to get some huge savings. We sort of joke about it, the statement to the board of directors and the external shareholders that says: "We just signed a deal where we're going to spend a gazillion dollars with company XYZ for the next 10 years and we are going save $100 million a year." Now there may be some short-term savings involved in some of those deals, but there are rarely massive long-term savings; because the reason you outsource is not only to save some costs but also to leverage someone else's scale - to have better service levels and leverage other people's capabilities and skills. But in our opinion, the most important reason that you outsource is to outsource those things that are not strategic to your clients, so that your talent and your people can be focused on building, managing and maintaining the systems that matter to your clients.

Lots of outsourcing gets done for the wrong reasons. When I go in and talk to CFOs, the question they ask is: "How can I outsource to save money?" And in our first conversation we always say: "Hey, be really thoughtful about what you're going to save, because that's a model that's not necessarily valid."

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