Offering regional and national programs, CIO (and CSO) events bring together some of the most respected names and thought leaders in information technology and security. Presented by CIOs and other senior level executives, these invitation-only programs offer timely topics and strong networking. Learn More »
Public Council Teleconference: Application Rationalization — Hidden Costs and Smart Decisions
November 17 at 11:00 am US/Eastern (GMT-5)
Join Honorio Padrón, of The Hackett Group, who will share the drivers for companies to tackle application rationalization and the results of research that define the hidden cost of complexity. Additionally, we will discuss key decision milestones—to start or not, holding the course steady and fulfilling expectations.
Virtual Desktop Cost-Benefit Analysis — Michael Jacobs, Catlin Group
The analysis contained in this presentation measures the cost of everything from the machines and licenses to the infrastructure for virtual vs. traditional desktop environments.
Honor your best senior team members - Apply for the CIO Ones to Watch Award
Get well-earned public recognition for your top up-and-coming team members, your IT organization and your enterprise. Award winners will be announced, publicized and feted in May 2010, great timing to help attract new IT recruits to your company.
Learn more about the CIO Executive Council »May 01, 2007 — CIO —
Nandan Nilekani, CEO of the outsourcing firm Infosys and the man who inspired the phrase “the world is flat,” is pushing a new mantra that could become just as universal:
“Work will be done where it makes the most sense.”
Relaxing on the couch in his Bangalore office, Nilekani points out that his own company has offices in 39 countries around the world. And it’s not alone. Wipro, another large India-based IT services company, has eight offices in Europe alone, and TCS, the IT services arm of the Indian conglomerate Tata, has 10 development centers and 10,000 consultants in the United States and Canada.
Meanwhile, providers we identify as American are no longer so. IBM now has 53,000 employees in India (up from 4,700 five years ago), and Accenture (which is actually based in Bermuda) will soon have more employees in India than in the United States and delivers its infrastructure and hosting services from 15 delivery centers scattered in countries across the world, including China, Argentina, Slovakia and the Philippines. In other words, as sourcing has gone global, so have sourcing companies.
And it hasn’t just spread. It’s evolved. Sourcing isn’t just about finding cheap labor anymore. Yes, you can still take something, ship it offshore and probably save a few dollars. “But cost in and of itself isn’t going to get anyone a competitive advantage,” says Tom Sanzone, CIO of Credit Suisse.
The New IT Supply Chain
The new model is more refined and complex. Today, IT services companies take work, break it down into pieces, and perform each piece in the location that offers the best combination of skill, cost, quality and manageability. If, for example, a new insurance application requires frequent contact with underwriters in New York City, any of the emerging global providers can do it there. But if there is a component of that work that only requires cheap coders, these companies will do that component in China, or if they need to speak Spanish they’ll do it in Costa Rica or Spain. “This is the future,” says Nilekani. “IT is being disaggregated. Slice by slice, the whole model is changing.”
With change comes opportunity for CIOs, who can tap into the global network that the outsourcing companies are building to improve quality, gain the flexibility and agility to respond to business changes faster, and, yes, save money. The outsourcing vendors have spent the past several years establishing centers of excellence dedicated to specific tasks—Java programming or business intelligence, for example. This allows for economies of scale and maximizes the chances that someone will find a way to improve the process. It also means that outsourcers have assembled deep rosters of talent, organized by skill and experience, that most CIOs cannot match. “I can’t think of any IT organization that has skilled people just sitting on the bench,” says Alan Boehme, CIO of Juniper Networks. “What you are really talking about is building a variable cost model for your IT organization.”