Sourcing: Out and In....Does IT Matter?
I was mulling over Prof Murugesan’s blog entry whether "Sourcing -- should be out or in?" The Prof. adds that the choice seems to depend on "the capabilities and attitudes of people, the business practices used, and the culture and relationships of the participating companies."
The launching point for Prof Murugesan’s argument was the article in The December 2006 issue of Cutter IT Journal that starts off arguing that "outsourcing may no longer be an issue primarily of cost, but rather one that involves a more complex set of business issues"
While reflecting on that viewpoint, I came across Nicholas Carr's views revisiting his "IT Doesn't Matter" theme. Carr has been blogging a series of articles on the topic, which make for an interesting read. In one writeup he concludes by saying "Now that IT has become the dominant capital expense for most businesses, there’s no excuse for waste and sloppiness."
Though Carr doesn’t really say in so many words, he is perhaps coming from the "core competence" angle where he hints that managers are better at focusing on their organizational core competence while sourcing their non-core IT to vendors who could provide economies of scale and operations. In a sense, he is perhaps eluding to a kind of flattening of business world that global service providers are successfully offering? To this, Vinnie Mirchandani, a former Gartner analyst argues that
IT does not matter. Quit beating on the 15% tail and focus on the 85% that is spent on vendors. I mentioned this to a sourcing exec recently - and she lit up. So the biggest single skillset IT really needs is vendor management, not architects, not DBAs - she asked.
What implications do these emerging viewpoints in IT management have for those managing Projects and Programs, especially offshored ones? A lot…especially for managers working with stakeholders who build business case for newer technology initiatives...or for those proposing that "non core" activities be sourced. [now what does "non core IT" mean in your context?]. On the sell-side of the spectrum, managers responding to proposals for sourcing work need to be aware of such emerging viewpoints to ensure that their proposals resonate with the business drivers.
Footnote: A few years ago, Nicholas Carr's article titled "IT Doesn't Matter" generated a lot of
debate among managers and executives. Needless to say IT executives were perplexed and up in arms against the argument, especially since the message from business leaders was clear: IT (systems and innovations) did matter. I too had my viewpoints on the topic at the time
