Transformational outsourcing has long been hailed as the next big step in the evolution of outsourcing and offshoring. But what exactly is it all about? Bigger and more integrated deals? New service and operating models? Deals with SLAs focused around business value rather than traditional metrics?

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In many organizations the annual planning cycle is well underway. Some CIOs and CTOs enjoy a privileged position and are at the heart of shaping the future of their organization through this process. Others are at the receiving end of this process and work under constraints that make it hard to deliver technology-enabled value creation for the enterprise. The difference sometimes comes down to personal characteristics: charismatic leaders, strong communicators and proven relationship builders often achieve greater impact. But there is also an institutional aspect. A good understanding of the role and value of technology among all executives in the organization makes it much easier to deliver impact.  How can this be improved?

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A recent study of global CIOs by IBM shows that what keeps CIOs up at night isn't necessarily just  short term IT cost pressure. The study indicates that  intelligence & analytics (cited by 83% of respondents) and virtualization (cited by 76% of respondents) are top of mind.

This makes sense and suggests  that CIOs are thinking ahead in terms of how IT can help position their companies for success in the new normal.

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Three European telecom operators at a recent conference talked about some of the benefits of outsourcing that are not always obvious. This includes drastically reducing the number of time and materials contractors as well as their IT costs. In addition, time-to-market has not suffered as a result of outsourcing & offshoring but actually has improved. And while the telecom operators have reduced costs, they have created scalability, meaning they are able to better adapt to demand variations.

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The Wall Street Journal reports that technology companies are beginning to increase advertising budgets in hopes that IT purchasing is going to turn the corner and begin to pickup after a slow year due to the recession.

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Over the last decade, a number of leading firms have attempted to take outsourcing and offshoring to a higher performance level. To this end, they have experimented in a number of areas including upgrading relationships with vendors, new service models, and different ways to structure O&O deals. I have often wondered how these programs have fared especially as the economic landscape has shifted in recent years. To get a better handle on this,  I queried a number of colleagues whose expertise covers a broad range of offshoring and outsourcing topics. While by no means a scientific survey, I think the information gathered is both interesting and useful. 

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I’ve long believed many large and mid-size organizations are missing an opportunity by not “engaging” in IT architecture. I confirmed it again the other day during an informal discussion with David C. Robertson, professor at IMD in Lausanne, Switzerland, and one of the authors of the book “Enterprise Architecture as Strategy”.

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For the second year running we have surveyed European telecoms on their IT use. Our  benchmark study looks at IT spending as a share of revenues and also probes the IT effectiveness of telecom operators. While the IT spend on revenues is easy to measure,  IT effectiveness is more complicated. We have developed a score that takes into account three key dimensions: time-to-market for new products and new tariffs, IT service availability and functional coverage per key IT domain (e.g., sales & marketing, provisioning).

Preliminary findings show that fixed line operators have improved their cost position by about 1 percentage point, which is a a significant improvement, while their effectiveness score rose by about 10 percent. Mobile operators have not improved their cost position but have improved their IT effectiveness by about 6 percent.

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The idea of amassing huge amounts information is an attractive theme for many organizations.  But what’s often overlooked is how all that data, while a potentially powerful asset, can also become a big liability. Collecting information carries with it both a moral and a monetary responsibility since data needs to be cleansed of private information not needed for analyses, as well as safeguarded, and eventually disposed of properly. But what I would call “healthy” data practices are lacking at many companies.  That arises from a disconnect between the incentives and risks of data harvesting. While the benefits of data mining can be quantified and realized in the short term, the risks take longer to appear and are harder to measure.

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We are seeing a burgeoning of innovation in the application of information technologies in the public sector.  One trend is the increasing willingness of governments to make their data available to citizens and other organizations outside of government through which they can create their innovative services. But just making the data available is not enough; it must be made usable by visualizing it in ways that create insight, or embedded into other tools.  Several organizations advocating for greater government transparency are creating very innovative applications that visualize public data.

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