CIOs Are Now Outsourcing Managers, And They’re Stronger As A Result

CIO Outsourcing

The role of CIO was created to ensure a CEO’s technology vision would be optimised and delivered. But in the last few years, these best intentions have produced the opposite effect. Despite large investment profiles, IT has not delivered the efficiencies or business transformation promised.

About 70 per cent of IT related projects fail to deliver the desired benefits they had set out to achieve. Perhaps this is why high profile CIOs have left their positions half way through projects in the last decade. BT Design, Network Rail and the London Stock Exchange have all experienced this.

CIOs have been expected to deliver a company’s IT vision, but often end up fire fighting due to no fault of their own. As businesses grow they make acquisitions, which require constant work to integrate. Ironically, the more successful the business, the more acquisitions are made and the more time and resources are required to keep everything functioning. In the fastest growing organisations, CIOs have been left running just to stand still and struggle to implement new projects.

For example, if a service provider plans to launch a mobile service to complement its VoIP offering it will require bespoke technology and integration. That takes time and money, but is fraught with challenges and needs to be balanced with existing demands on the CIO.

By the time the project comes to fruition, it is often too late for the business to gain a lead on its competitors. If an enterprise wants to introduce new telecoms systems in-house, the path to success presents the same obstacles. Creating the technology and information infrastructure without external support is just too costly and cumbersome for the CIO to deliver effectively – especially in those fast-growing firms that are struggling with the influx of new systems and technologies that often sit in silos.

This has led to the advent of cloud and outsourced services that enable businesses to satisfy many IT requirements on demand. Knowing their role is a tough one, CIOs have jumped at the chance to embrace these offerings. 59 per cent suggest that enabling alignment of business and IT strategies using cloud infrastructure is their number one priority.

In the telecoms world, CIOs can open call centres at the signing of a contract, implement mobile working policies and technology in days, and offer unified communications over night. All thanks to the cloud.

The role of CIO has transformed from leading and implementing a technology vision single handed to managing outsourced contracts, which is arguably their saving grace. They can deliver a technology vision and add real value to the board.

The key lies in accepting the new reality and implementing strict supplier governance. Throughout the financial crisis this has often meant beating suppliers down on cost. But this comes at a price. Forrester Research has found that endless focus on a cost-based procurement model has left companies with rock bottom prices, but poor delivery and execution track records. Arguably, this leaves the CIO in as tough a place as they would be trying to deliver projects themselves.

Forrester’s answer is for IT leaders to avoid a centralised procurement process and focus on business outcomes and then build a service that meets those needs rather than a rock-bottom price. They need to ensure they are managing a portfolio of services that drives value for the CEO.

For CIOs in the telecoms space, this means looking for partners who offer real business value. Enterprises with new communications needs will require service providers that allow them to communicate effectively, efficiently, economically and securely with their staff, clients and suppliers – not just cheaply. The service provider needs partners that make it simple and quick to create, tailor and sell new communications products and services. Only by doing so will the CIOs of both types of organisation retain their position as someone who can add value to the entire ecosystem.

The challenge faced by CIOs is where specialist consultancies and third parties can do their job quicker and better than the CIO themselves. This shift undermines the CIO’s original role. But with the right approach to partnerships, CIOs can fulfil the demands of the business better than ever. They need to embrace cloud services and work with providers as an extension of their team. Trying to carry on unaided by third parties is no longer an option.

Scott Goodwin

Scott Goodwin is the CEO and founder of Weavesys. A serial entrepreneur he has held a number of C-level positions, specialising in technology-based start-ups. He has also overseen businesses as they go through significant change programmes, while developing diverse sales and distribution channels, web strategies, application development, and system and process optimisation. He is also currently CEO of Voxclever, a firm providing fully managed hosted IPT solutions to commercial customers. Prior to these roles, he was Group Managing Director IT & Services at Regus, founder and CEO of Goodman Blue, a software development and services company, UK CEO of Telia Mobile International, and has also worked for Cable & Wireless and Siemens.