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As we progress through the age of digitally transforming business models that enable organizations to conduct global trade in a more and more efficient, innovative, and customer-centric manner, today’s CIO faces enormous challenges that no longer can be met with an all-internal IT staff. This is not to imply the traditional internal IT departments will fade into obsolescence. On the contrary, they will be bolstered by a hybrid IT framework with the internal IT function evolving, and the successful ones building a powerful, flexible, go-to partner ecosystem that will broker the vast array of technology advances and expertise that are desperately needed for businesses to compete in the 21st century.
To this end, the ability to build and develop new, meaningful relationships with key technology partners will be the catalyst of a successful, responsive IT organization. No matter what the need, from legacy application support to helping drive the company’s digital transformation, building a trusting partnership with valued third-party entities is vital to the overall success of executing an effective IT strategy.
But how does the 21st century CIO go about this significant undertaking? As with forging new friendships in one’s personal life, building and nurturing a new relationship with a technology partner based on trust and common goals is never an easy endeavor. Here’s a checklist of 10 tried and proven methods to select the IT partners your company needs to become successful.
• Perform the proper due diligence in determining whether outsourcing is right for your company. Tie your sourcing strategy to the company’s business strategy. Make sure your company is ready to treat key technology partners like they are part of the overall organization.
• Fully understand how external relationships will affect the current IT organization’s employee morale and productivity. Also, will an outsourcing relationship impact current customer relationships?
• Obtain upper management support by creating a decision-making framework based on your sourcing strategy. This is achieved by having an accurate understanding of your IT organization’s total costs, your IT service levels that need to be attained, and what IT functional areas would be best considered for outsourcing.
• Always conduct a full-scale RFP process in selecting an IT technology partner. If your company has business units that provide IT services, stand firm on insisting that these business units participate in the RFP process just like an external organization.
• Ensure that a clear, detailed understanding exists between your company and the IT sourcing provider on the responsibilities of each party. Ensure the responsibilities are thoroughly defined and assigned in the forthcoming legal agreement governing the outsourcing relationship.
• Maintain a line of strong internal full time IT Leaders responsible for setting IT strategy and managing the day to day activities of the technology partnership. The IT leaders should report directly into the CIO office.
• If the potential partnership involves the transfer of key internal employees to the external IT partner, identify and document in the contract “key personnel” who will continuously remain active on your company’s account unless otherwise specified. If key personnel terminate employment with the IT partner, clearly lay out the steps required to replace the departed key personnel in a timely, urgent manner.
• Clearly define and document your security and intellectual property protection requirements with the IT outsourcing partner.
• Specify that the internal IT organization is responsible for the management of all services provided by the IT outsourcing partner. The CIO should insure that a set of primary points of contact exist for all current or future service activities of the IT partner.
• Once an IT outsourcing partnership begins, be diligent in monitoring the performance of the partner. Ensure that agreed-to service levels and/or specific projects are being achieved. Recognize partnerships achievements as well areas for improvement when expectations of the relationship are not being met.
Fellow CIOs, please stay the course on this one. It will guarantee a winning outcome in building the most nimble, versatile, and cost-effective IT organizations that successful companies will insist it must have to thrive.