World Class IT:
Introduction:
World class IT is a level of excellence that Information Technology department earns when its operation meets most of the objectives it set out to perform in the business. Therefore, world class IT is a combination of many factors: the effectiveness of technology in providing customer service and increasing sales; the understanding of IT personnel of the actual business objectives; and facilitation of an efficient communication system among various corporate departments and suppliers. World class IT can be different from one company to another. What works for a small business as world class IT department might be an inferior IT performance for a large multinational corporation.
There are five principles that IT department must do to provide its objectives to the company to be called world class IT department: First: Recruit and retain world class IT employees; Second: Build and maintain a robust IT infrastructure; Third: Manage projects and portfolios effectively; Fourth: Ensure partnerships within the IT department and with the business; and Fifth: Develop a collaborative relationship with external partners.(1) In this article I will choose to explain and analyze the fifth principle: developing a collaborative relationship with external partners and explain its meaning, and objectives.
In this principle, IT management would determine if outsourcing is worth it or not for the company. Investopedia defined this function as : “Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more affordable to purchase a good from companies with comparative advantages than it is to produce the good internally” (2)
Outsourcing company’s IT functions can be easy and cost efficient to some companies but not to others. In some companies outsourcing skills that current employees lack makes business sense. The financial and time cost of training current employees in such skills can be high. Outsourcing these skills to external partners would be more efficient. Another example, for a small business of 5-8 employees, outsourcing purchasing function will not make sense if one or two current employees can perform such a function with minimal conflicts. Therefore, a bona fide assessment of the company’s need for outsourcing must take place. Such assessment will determine if the company would benefit or waste the outsourcing expense. While outsourcing can be determined as a viable solution to the company’s goals, the external partner must meet the parent’s business goals for the outsourcing to be successful. It follows that for the outsourcing to be successful; the outsourcing company has to follow business sense steps to deliver the needed goals. These steps are: First: Have an IT member learn the actual business operation. Second: This member can mentor the outsourcing company with the parent’s business operation. Third: Set up success measures that assure that the operation is running as required. Fourth: insists that the external partner delivers value to the parent’s company not just hours spent on the project. It is worth to mention that outsourcing company must have the same goals with the parent’s company as far as the project concerned. It must deliver the final project based on how much value the parent’s company will benefit from it. The premise should be if no value delivered to the company means the failure of the outsourced company to meet its obligation. Therefore, paying the outsourcing company based on success measures and value to the company ensures that the objectives have been met. That is why it is extremely crucial to research and negotiate the company’s goals and objectives and communicate them to the outsourced company. Success measures that define the success or failure of the contract must be planned (1).These steps would produce a smoother outsourcing operation and its success. The question is what to outsource and what not to outsource? Businesses should outsource application development, and maintenance; Outsource website or e-commerce systems; Outsource disaster recovery services; data network operations; IT security; and Database administration as the top outsourcing functions. It is not business sense to outsource Business analysis; Enterprise architecture, project, portfolio, and vendor management (1).
Conclusion: The world class IT, then, is a combination of many factors: First: IT personnel must understand the business strategy and goals so that they design and maintain IT functions to serve company’s bottom line. Second: build a solid IT department, Third: manage and run a strong IT portfolio and Fourth: IT objectives must be in harmony with those of the whole business, and Fifth: When outsourcing is needed, the external partner must deliver the same objectives and value that the parent’s company needs. Therefore, hiring an external partner for meeting company’s goals needs research of the best company that fit the parent’s company objectives in terms of its business strategy. The outsourcing contract must spell out the exact terms, tasks to be performed, scope and limits of the external partner. Furthermore, IT personnel must monitor the outsourced company through contract success metrics. That is, IT personnel must ensure the operational objectives are being met.

References:

1. World Class IT: High, Peter A. Why businesses succeed when IT Triumphs., 2. www.investopedia.com/terms/o/outsourcing.asp