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Sourcing & Staffing

A monthly review of all of the sourcing activity, upcoming tenders and news items

A monthly review of all of the sourcing activity, upcoming tenders and news items

 

Conclusion: “Offshore outsourcing” or the practice of outsourcing IT or business functions to other geographic regions is growing, with similar trends forecast for the future. While offshore outsourcing offers cost-cutting opportunities, it does possess risks unique to offshore projects, which have resulted in mixed success when adopting this strategy. Detailed risk assessment, strategic planning and ongoing management must be conducted by any organisation considering an offshore project, or commercial benefits will be lost, ultimately negating proposed cost savings.

Conclusion: While attracting and retaining staff is no longer a pre-occupation of CIOs, the challenge today is to manage IT professionals in a way that maximises their contribution and minimises the possibility of them seeking another role.

The ANAO has recently highlighted the ineffectiveness of the contract performance monitoring and management activities in the last five years of government agencies which have engaged external suppliers of IT services. The Federal Government’s experience in this area is salutary and provides a timely warning to organisations considering outsourcing IT functions.

 Conclusion: While certain types of IT sourcing deals (such as large “mega deals”) have been criticised by commentators, it may not be beneficial for all organisations to alter their current IT sourcing strategy. All potential cost and management problems must be carefully considered prior to altering any sourcing strategy.

A monthly review of all of the sourcing activity, upcoming tenders and news items

Procurement of PCs, software, servers or services can seem overwhelming due to the complexity inherent in the process, market and business volatility, and uncertainty in the vendor community. Buyers should use a formal process - including the establishment of documented best practices and standard document templates - tailored to that organisation’s culture and structure to bring discipline to the process. Ultimately such an approach will reduce TCO. A successful negotiation requires a complete understanding of the product or service, how it will be used, user profiles, and identification of vendor negotiating levers.

Conclusion: Successful projects are analogous to freshly cooked puddings in that they not only have to smell nice when taken out of the oven but also excel when tasted to earn the praise of the client. Or to put it in simple terms a successful project is one that has helped the firm to realise the expected business outcomes.

To increase the probability of firms implementing successful projects senior managers must, at a minimum:

  • Identify staff with potential to handle the political as well as the technical arena of projects and a) give them training in project management disciplines as well as b) negotiation and influencing techniques

  • Implement the initiatives described below, monitor their outcomes and ensure the lessons learned in both technical and political arena are widely disseminated

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