CIOs and Outsourcing

CIOs and Outsourcing

What about companies to which work is being outsourced? What's the role of the CIO within the context of the extended enterprise—and can contract language help?

SEKAR: Mostly, it's a data tracking challenge. You can't simply impose cultural and behavioral norms only through contracts, because they're driven at the highest level of the organization. The people who execute the contracts are, typically, people at the lowest levels. It becomes, therefore, incumbent on IT to make those who execute contracts aware, day-to- day, of any changes in contracts or customer demands and expectations. IT has a role in that it can help a company monitor and track behaviors of partners, vendors and outsourcers, so the company knows if rules are being followed. Information, delivered in real time, gives people a chance to take action if that is their choice.

But not everything is on an intuitive level. For example, we had this huge restructuring charge that we took, and then we did a whole bunch of projects under restructuring. But there were a lot of issues because people were charging things to restructuring that did not really belong to restructuring. IT projects, for example, that supported the restructuring were okay. IT projects that did not support restructuring should not have been included—but some were.

It became an issue of communicating clearly what is a restructuring charge and what should not be a restructuring charge, what capital can be brought under IT and what cannot. And once we were able to communicate that, it became a lot easier—but because communication was manual for quite a while—some accountability got lost. The issue with WorldCom was an issue, I believe, of capital and expense reporting. WorldCom made a policy change. Was that policy change communicated and was it approved?

BURKE: I agree that all the executives in a business have to be responsible for the ethics in the business, but the CIO has an additional responsibility because technology governs so much of how we do things and what we can actually do. He or she needs to be cognizant of what the organization's ethical goals are and how technology impacts that and can help to maintain those standards.

This article was originally published on 08-13-2002
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