Keep the work local and spend the extra money or send it overseas and get near the same value at a lower price? For many budget-conscious CIOs, the latter makes sense. But that doesn’t mean offshoring isn't a panacea for cost-constrained IT department; it can involve risks and potential long-term downfalls when it comes to business agility and innovation.
Many IT departments perform software development projects with a focus on delivering software with required functionality by a certain time and for the benefit of business. Unfortunately, this focus for such projects is wrong.
"I'm so done with alignment," declared the CIO pacing across the stage at our CIO Perspectives New York event a few weeks ago. "It's not even part of the conversation anymore. IT and the business are in this together. Period."
According to Dr Tim O’Neill, co-founder and director of business intelligence specialists Avolution, probably the biggest mistake an organisation can make when dealing with suppliers is to outsource the systems architecture. “This is why there’s so many untold billions of dollars-worth of failed IT projects out there,” he says. “Outsourcing the architecture function is fraught with danger.” In order for projects to be successful organisations need to maintain a healthy degree of cynicism and effectively force vendors to earn trust.
The IT choices a company makes can mean the difference between business success and failure. Whether it’s access to information, communications between staff, partners and customers, HR, inventory management, operation and monitoring of equipment and other and assets as well as business security, IT has managed to make itself indispensible at virtually every organisational level. Yet it would seem that for many organisations, this awareness often fails to translate into properly thought out and well-executed strategies for managing the vendors that supply the technology.