Strategy cannot be outsourced

The ninth annual Technology Issues for Financial Executives survey predicts overall IT spending is expected to increase modestly in the next year. Roughly 25% of respondents expect the financial programme or project share of total IT spending to increase, reports CNN Money.

In addition, it revealed about 20% of organisations with more than $1 billion in revenue anticipate outsourcing some aspect of their IT in the coming year.

However, it said while some capabilities can be outsourced, overall IT strategy remains in the hands of management, particularly the CIO and CFO. Strategy cannot be outsourced, and skilful CFOs will push the organisation to derive ROI from IT spending, whether outsourced or insourced.

An increasing number of Canadian IT companies are displeased with their outsourcing vendors, according to an IDC Canada survey released last week, says IT World Canada.

IDC Canada did an outsourcing satisfaction survey in 2004, with this recent survey revisiting similar indicators such as the number of referrals and contract renewals.

"Businesses satisfied with their outsourcers dropped from 50% to 33%," said Mark Schrutt, IDC Canada's research manager for outsourcing services.

A growing company in Rhode Island recently decided it wanted to reduce the cost of its technology infrastructure by outsourcing much of its development and maintenance to China, a booming new market for IT outsourcing, says PBN.

The company turned to Ciber, a billion-dollar IT services and consulting company known for global outsourcing. However, Ciber advised the company that outsourcing to China was not a good idea.

Growing companies often look to outsource their IT development and support to India, China and other offshore locations as a way to reduce costs, increase functionality and speed their products and services to market.