Throughout the first quarter of 2013 this debate has raised to the forefront once again as companies seek to determine which approach will reap the greatest competitive advantage; does your company out-source IT or keep it in-house. The question that is really being asked here is whether IT is viewed by the organisation as a cost or is it viewed IT as an investment, which is integral to the competitive advantage of the company? This is not a question that can answered at a department level. It can only be answered at a central level, actually (and more specifically) at board level. It is the identical question that is also frequently raised for budgets associated with Training or Marketing – are these activities that are viewed as luxury items, to be engaged with during prosperous times, or are they the essence of why a company is successful in the first place. Whichever stance a company takes, the question an IT Manager needs to ask is ‘does the Board truly understand how effective IT could make the business?’ If the Board has only ever considered that IT is a cost to the business, then they will be keen to control it (the cost), which will often mean outsourcing it. What is essential to remember is that the Board will only make decisions for (what they consider to be) the best interest of the company. However, they can only base these decisions on the information they have available to them at that particular time. After speaking with CIOs, Change Managers and IT managers who have all experienced the complete IT life-cycle of starting off as in-house, then being out-sourced, ultimately facing redundancy and starting the entire cycle over again, it was interesting how they used this experience to their advantage. Instead of blaming of the company for poor decision marking, they looked at their own role within how the events had played out and realised that they ‘assumed’ that the Board understood the value the IT function could add to the business. This led them to conduct further self-analysis to evaluate how many assumptions they also made with regards to how well other departments understood the value that IT could add to their function. Ultimately, they realised that they had assumed far too much and in actual fact the Board, and the organisation in general, had very little awareness of what IT did and what it had the potential to do for the business. So, when these individuals were presented with the opportunity to take on a new role, they decided not to leave their new situation to chance, instead deciding to take the initiative and present clear plans and projections to the Board, which displayed the value IT was providing and could provide to the business. This involved analysing how IT was being used in departments throughout the organisation, listening to the frustrations of Departmental Managers, gaining an insight into the business objectives they wanted to achieve and then formulating plans to help them achieve these goals. The biggest change in their working approach was to go from being a very isolate department, to one that frequently interacted with ALL departments within the business. The goal was to show that IT was integral to the business, rather than a separate function from the business. As one CIO told me,

“we went from being viewed as ‘back-office support’ function to a team that could help the business realise its goals by leveraging value in so many areas of their current activities. It took a while for them to open up to us and being to trust us, but that came through regular meetings and lots of small improvements. However, once the trust was established we were able to rapidly add substantial value to their function.”

Another explained that,

“any departmental function will be outsourced if it is purely viewed as a non-core support function. The key is to help everyone understand the value that you deliver and how you help them achieve their goals – this applies for you as an individual or for an entire department.”

This may be a well discussed (old) topic to some but it seems to be continually affecting IT professionals, whether it is consultancies winning or losing contracts, staff being made redundant due to outsourcing, or new roles opening due to on shoring. When an organisation hires a CIO, COO, IT Manager or Change Manager, it is imperative that all parties (The Board, IT, other departments and the Manager themselves) use this opportunity maximise the skills and ideas that have been obtained. However this will only occur if communication throughout the entire organisation, up and down and side to side, is constant and open. Information gaps can be bridged and problems can then be solved. I’ll add two final quotes to finish on, “Persuading the Board that IT is worth investing in is a battle, but when you make it work & prove the capabilities you have won the war," and “I love the challenges that IT can bring and how adapting it to the business can lead to so much advancement.”

Recommended Reading:

Linchpin - Are you Indispensable? by Seth Godin

FURTHER INFORMATION For more information please contact Marie Sullivan at Jenrick IT on 01932 245 500 or email