AUCKLAND, 17 JANUARY 2010 - At the 2009 CIO Summit I was asked the question, "what strategies did you employ to manage the recession"? I candidly replied: "outsourcing'.
Just as quickly I was asked what strategies I would employ post-recession. Again, I responded rather blank faced: "outsourcing".
While all the economic indicators point to a steady improvement in economic conditions, it's worthwhile for IT teams to reflect on the lessons learned and keep applying them as we look ahead to the new paradigm we are left to operate in after the economic recession.
It reminds me of one of my first trips to America. I arrived in the country with about US$250 to my name and the promise of big things to come in my new found employment.
While I knew my new job would soon lend itself to financial prosperity of sorts, in the meantime I had very little to survive on and had to learn to live within my means. That meant having to budget very tightly -- eat and live in a measured way - until I was in a better position.
That life lesson has stayed with me throughout my professional career, and it's a philosophy I've carried into my working life as well, and it became pertinent during this current economic recession.
Without the experience of that life lesson at an early age, it might not have been as easy to navigate the recession. Because it taught me that if you manage what you have during the hard times, you can be successful when the good times arrive. But most importantly: whatever the economic conditions, live within your means.
This brings me back to outsourcing. The research firm Forrester estimates worldwide IT-related outsourcing is now about a $120 billion per year business and that it will continue to grow. Domestically, IDC research says the outsourcing sector increased by nearly 7 percent year-on-year in 2008 and was higher than overall growth with IT services. Furthermore, it predicts outsourcing to grow by a compound rate of 4.5 percent over the next five years, as an industry will be worth NZ $1.5 billion by 2013, and comprise more than 47 percent of the entire tech services market at the same time.
While I suspect the growth in outsourcing is not strictly IT-related; in other words services such as contact centres and mechanical maintenance and engineering have also been thrown into the outsourcing mix, what we can see is that outsourcing offers opportunities for businesses to explore cost savings.
As IT managers, as well as with the IT strategists, we need to come to terms with the advantages outsourcing offers, rather than frown upon it as some kind of a scourge.
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