by August 14, 2006 0 comments

At least the biggies amongst IT vendors believe so. And their argument has a
compelling logic behind it. With India becoming the outsourcing hub to the
world, it is becoming increasingly difficult to find and retain good tech talent
in the IT departments of corporate India.

Given a choice between the limited opportunities in an IT department and the
larger world of the outsourcing service provider, the choice of the potential
recruit is going to be but obvious. And then, rather than struggle to keep the
systems going, the CIO is better off outsourcing the whole of his IT needs.

Krishna Kumar, Editor

So, the CIO is the only one who is left of the IT department. At least that
is how the argument goes. Like I said, the logic is compelling. The only problem
is that IT solutions and implementations continue to be too complex for this
model to work right away. I have in the past used the analogy of electricity to
talk of IT services being outsourced.

In the case of electricity, there is one universal measurement of what you
need. But when it comes to IT, what is the picture? Do you need CPU cycles or
assured transaction times or commit times or storage or TPC benchmarks? Do you
need database access or web service querying or CRM or design platforms?

Is one CIO enough to plan all this and monitor the delivery of whatever has
been agreed upon? Has IT reached the stage where deliverables can be put down as
a set of formulae for most organizations? Would not the team that is monitoring
the deliverables turn out to be another IT
department, after the IT has been outsourced? Given the complexities involved,
there is no one-size-fits-all solution to the question of outsourcing. That’s
why, when I go back to the same vendors who are pushing the domestic outsourcing
message and ask them how many deals have they actually signed, I am answered by
a long silence and a rather measured — “we are discussing…”

I am not saying that partial or even complete outsourcing of IT requirements
and management is not possible or not warranted. Only that the system is too
complex for a straight forward answer, or a simple model. Also, currently, the
two main planks on which the domestic outsourcing story is being built up are
the inability of IT departments to attract quality manpower and the ability to
turn a capital budget entry into a revenue entry. The first argument will cut
more ice with smaller enterprises and the second one with larger ones. But more
compelling ROI based arguments are scarce in the public domain.

Which is why, even two years after it was signed; the Bharti-IBM deal is
about the only outsourcing deal that the industry has as a reference point to
talk about.

While vendors and even CIOs will keep pushing for more and more outsourcing,
there is an urgent need to simplify the methodologies used to measure IT
services delivery and the models based on which outsourcing is done. Until then,
domestic IT outsourcing will be more talked about than done, and there will be
more lawyers than technologists involved in drawing out these deals, on both
sides of the table.

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