CIOs Conflicted About IT Outsourcing

While offshore outsourcing seems to be a done deal for American corporations as they rush to save budgets, CIOs here are still in conflict over whether it is a smart move for the IT department. In fact, ambivalence over outsourcing seems to be the norm.

The biggest fly in the outsourcing ointment is trying to manage an offshore workforce. In a not-for-attribution discussion yesterday, those CIOs most confident about outsourcing offshore were those who had nailed down close relationships with the outsourced staff. One of the most effective ways to do that has been to engender among the outsourced staff a feeling that they are part of the customer’s team, that they are employees of the company hiring them. That helps the outsourced staff feel they are part of an integrated team.

Another obstacle to easy outsourcing is dealing with the staff that is left in corporate. Morale among those workers not outsourced tends to be low, with many of those left behind wondering about their value to the company. Suggestions to combat this problem included focusing on communicating to the staff left in the corporate IT department about what their role is and the value they bring to the company.

Still, some CIOs are vehemently opposed to outsourcing. Tim Buckley, managing director of the information technology division at The Vanguard Group, was one of those CIOs who would rather not outsource. He said keeping IT functions inhouse at Vanguard gives the company more flexibility to absorb growth and serve client needs.