Fox IT Symposium
Is Outsourcing a viable long-term business strategy?
February 4, 2004
7:30 to 10:00 AM
Fox/Gittis Foyer
Liacouras Center
Temple University Main Campus
Panelists
Larry Dignan, News Editor, Baseline
Bruce Hillier, Partner, Global PeopleSoft AMS, IBM
Michael Palmer,
Allied Office Supplies, Inc., CIO & EVP Supply Chain Management
Niraj Patel, Executive VP & CIO, GMAC Commercial Mortgage
Rajiv Tandon,
SVP Banking, Financial Services, and Automotive, Syntel
Moderator
Bill Siegle,
CIO, ACE INA Holdings, Inc.
Event Summary
There is no technology topic that is currently more visible to the collective
communities of technologists, business executives and even the general public
than the subject of Outsourcing. From its origin as a management efficiency
practice for controlling IT costs and focusing upon core competencies,
Outsourcing has ventured far beyond its original technology boundaries. The
practice of Outsourcing now has economic, competitive and even political
implications. Outsourcing has reached the point of being not only a component of
a company’s technology strategy but in many cases their business strategy. But
is the growing practice of outsourcing technology functions and the execution of
specific business practices a viable long term strategy?
The Panel primarily focused upon three major components of the topic of
Outsourcing. These were the long term viability of Outsourcing, the critical
success factors in its implementation and career and developmental
considerations for students.
Outsourcing is first and foremost a business response to fundamental and
competitive factors. Such opportunities as expense reduction, efficiency
improvements, organic business growth, response to acquisitions and skill
improvement are quite simply driven by the economic reality of globalization.
The business practice of Outsourcing has no geographic or political constraints.
Outsourcing will in fact penetrate more deeply into the value chain of a
company, having been initiated as a technology practice but now growing rapidly
into areas of business process.
The implementation of Outsourcing requires considerable skill and focus
beyond conventional projects. Aspects of onshore, nearshore and offshore
Outsourcing were discussed. While greater opportunity for expense reduction
occurs with the practice of offshoring, there is also a greater degree of risk.
Successful Outsourcing practices must include:
- Substantial change in processes to leverage the new business model
- Keen awareness of cultural impacts upon doing business
- Complete and thorough documentation of processes being changed
- Honest and open communication to employees
From a student perspective there were a number of observations:
- Recognize that Outsourcing is a reality and do not restrict yourself to
one specialized area of expertise
- Always focus upon what value you bring to your employer and constantly
upgrade your skills
- Know your employer’s business, not just the technology you individually
support
- Smaller companies, in particular, may be driven to Outsourcing and this
provides opportunity for an employee to understand multiple components of a
business
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