Critcal Strategic Sourcing Criteria

You’ll find the mighty dollar on the hook at the end of the outsourcing pole, temping leadership to grab the bait and save a few bucks by shifting the work to someone else.  Here’s the thing:  although the daily chores might change hands, the responsibility doesn’t.  At the end of the day the weight of the business is still your shoulders, regardless of who is actually doing the work.  

Do a search.  You won't find any sensible professional who would use cost reduction as the only criteria for outsourcing.  Cost might be the biggest attractor, but the reality is that cost savings are typically much less than what was first calculated.  Unexpected and hidden costs abound.  

Let’s not use that term: outsourcing.  The trend is more toward strategic sourcing.  Manufacturing has taken the lead with strategic sourcing; IT is learning how to apply the same methodologies.  Manufacturing realized they could successfully outsource portions of their production if it gave them more than just monetary advantages.  Being strategic with sourcing is about creating a leaner and more responsive environment as well as cutting overall expenditures.  Consider efficiencies, speed, and quality.  If you lock yourself into a comprehensive, inflexible cost savings contract and the business needs to change, you immediately lose. 

Consider these criteria when faced with outsourcing decisions:

1. Core competencies.  The provider would need to posses specific experience and proven methodologies.
2. Track record.  Experience matters; it should be part of the offering.
3. Contract flexibility.  If the provider can’t move with your business, they shouldn’t be offered the opportunity to be part of your business.
4. Key personnel.  Providing specific experience and/or key personnel to the contract should be part of the deal.  Remember, you are sourcing what you would normally do in-house; this includes specific experience and people.
5. Cultural fit.  This is about equitable values.  Find someone who loves what you do and how you do it as much as you do.  This will drive performance and incentivize results more than most people realize.

The Three Cs for the CIO

Advancing to a CIO or CTO executive position might seem thrilling at first, but then after a few months it hits you.  The weight of the responsibility, the awakening stress levels, and the frustrations of getting everyone to move with the technology start to resemble the perfect storm.  Second thoughts about taking an executive position start to squash the initial excitement and the vision of what you wanted to accomplish.   Don’t let it get you off course.  Here is what I call the three C’s that young and successful CIOs must master very early in their tenure: communicate, collaborate, and concentrate.  

Communicate.  The transmission of information is the center of the CIO universe.  We can make our systems do this easily enough, but we’re not always good at it.  Geeking out on technology is what people expect from us, but it’s not how they want us to talk to them.  They also don’t want to be insulted by ‘bringing it down to their level.’  A CIO must find that middle ground with communication that is informative without sounding like an alien, yet practical so the listener finds application in what you are communicating.  And since I mentioned the listener, spend half your time listening.  This will necessarily involve making yourself available, even to the point of seeking out those who avoid you.  Establish a strong and frequented avenue for communication.   

Collaborate.  Establish strong collaborative relationships within your company, especially with key players.  This is not political positioning.  It is checking yourself to ensure you are fitting in with the corporate culture and cooperating with the strategic direction.  This also doesn’t mean you can’t have differing opinions.   Collaboration means that at the end of the discussion, even in a room of broad opinions, we find common ground and we move forward together.    

Concentrate.  Focus on the value you bring to the company.  The company leadership expects you to be the expert and the strategic innovator for all things information systems and technology.  CIOs need to keep up with the latest trends and best practices.  Our industry moves very quickly.  We can’t afford to lose pace.  Among all the noise and the full calendar of meetings, find time to get yourself caught up.  Refresh your knowledge base by reading up on the latest industry information and trends, going to seminars, taking classes, joining a local CIO group, or getting more involved with discussions among the experts on your technical and management teams.  

Mastering the art of communicating effectively, collaborating with key team members, and concentrating on your profession will create a solid and lasting career as a CIO.