If Machiavelli Were an IT Manager...

Oct. 15, 2007
Moving beyond the monolithic contract to divide and conquer outsourcing projects.

"Before all else, be armed." -- Niccolo Machiavelli

The urge to go to a single-vendor IT outsourcing setup is perfectly understandable -- after all, fewer headaches from vendor juggling and a long, cozy, multiyear contract can offer some peace of mind for those navigating the ocean of stress that is IT management.

However, things don't always work out that neatly. In fact, quite a few companies (nearly 50% in one survey) are having to bring some formerly outsourced IT work back in-house, making for two periods of business process disruption -- often for the price of three or four.

"The era of sole sourcing has played out and the results have not been impressive," says dbaDirect CEO John Bostick, a longtime IT industry veteran with experience at companies ranging from services startups to IBM.

Bostick says that strategic management of a multi-sourced operation comes down to strong in-house project management skills. He counsels companies to keep experienced IT managers and teams in-house, as they are essential to managing what is essentially an alliance between internal and external resources. "In a good multisourced IT structure, all operations should report to a director of the alliance," says Bostick. This "IT field general" can serve as a liaison to the vendors involved in the partnership.

Maintaining a strong, in-house presence will ensure that the business drivers maintain momentum.

The Art of IT War

Maintain the strategic high ground. Companies should outsource activities that are not competitive differentiators or core competencies; however, retaining and maintaining the strategic aspects of IT management and architectural design (as well as the people who understand and can manage them) is vital.

Divide and conquer. Increasing dependence on one vendor weakens the capacity to manage an outsourcer actively. Hold it in check and hold it accountable. There's safety in numbers.

Know your strengths (and weaknesses) before joining the battle. Companies shouldn't expect positive outcomes when poorly defined processes are figuratively thrown over a wall to an outsourcer. Diligent process definition helps in setting the objectives, milestones and metrics that must be met in order to ensure the outsourcer has delivered a successful outcome.

Hit fast, and hit often. Quick wins from limited "transactional arrangements" are very important, as they provide rapid value to the organization. It's easier to obtain near-term success from well defined, straightforward and tightly focused relationships than from more expansive and all-encompassing outsourcing partnerships.

Pick on someone your own size (or smaller). Large, powerful outsourcers may start to lose the incentives that can drive smaller, specialized outsourcers. In multisourcing environments, scale makes clarifying and measuring performance with multisourcing vendors easier. Plus, it's less costly to replace smaller vendors when expectations are not being met.

Source: John Bostick, dbaDirect

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