CIOs face both individual and organizational challenges when making the transition to an outsourced services environment. Here’s what to watch for.
The silo-focused tower view that often characterizes the CIO in an internally managed organization must be replaced in an outsourced environment by a commitment to enforcing standards across the enterprise. Inconsistent requirements and processes between customer business units will exponentially increase the cost of services as providers will have to accommodate multiple ways of providing those services. Additionally, enterprise service levels and key performance indicators become part of the environment to objectively measure performance; therefore, performance improvement is based on standardization and agreement by all parties to contribute to a common set of objectives and outcomes.
Adjusting to Change
How can CIOs prepare for the new demands posed by a transition to outsourcing? CIOs can proactively work with their service provider teams to prepare for the new roles and responsibilities that will result from the transition. Practicing and role-playing typical scenarios can be an effective tool to help managers understand new ways of interacting. Role playing, for example, can show a CIO how the ingrained response of diving in to solve a problem can be counterproductive in an outsourced environment, and how adhering to and trusting the provider’s process ultimately yields positive results.
Governance councils that mandate regular interaction between the CIO, retained staff and service provider teams can be an effective way to identify and address problems early on. While commercial actions and the use of contract terms are essential to managing service performance, these should be used as a last resort as they often lead to tension in the working relationship and, ultimately, further service degradation.
Investment in organizational change management is another key action that’s often overlooked. CIOs should identify individuals in their organization who are champions of the vision and advocates for the change, and equip them with a few key people to drive communication, change workshops and training. The retained organizational impact is almost always underestimated; focused energy on bridging from the old to the new operating model is therefore imperative.
About the Author
Lois Coatney is the director of Information Services Group.