Multisourcing Adds to IT Management Load

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April 10, 2006 (Computerworld) -- ORLANDO -- None of the IT managers in the audience at a Gartner Inc. outsourcing conference here last week seemed to bat an eye when they were warned that a lack of discipline in managing multisourcing relationships could result in "large-scale business disruption."

Gartner analyst Linda Cohen raised the specter of business disruptions after telling attendees that they need to develop disciplined approaches to outsourcing, not ad hoc ones -- especially as their companies adopt multisourcing strategies and sign contracts with more and more IT services providers. "You are heading for a much more complex operating environment where you have more services delivered externally," Cohen said. Strategic Responsibilities

The key to successfully managing multiple outsourcing vendors, according to IT executives from Du Pont Co. and ABN Amro Bank NV who attended the Gartner conference, is retaining strategic planning and architecture design responsibilities in-house.

By doing so, "you're responsible for your own destiny in defining how the systems work together," said Bruce Jacobs, CIO at ABN Amro's North American operations.

Amsterdam-based ABN Amro is outsourcing its IT infrastructure management, application development and telecommunications services. For example, the banking company finalized application development deals last September with five vendors, including Accenture Ltd., IBM and India-based firms Infosys Technologies Ltd., Patni Computer Systems Ltd. and Tata Consultancy Services Ltd.

The five vendors compete for individual application services contracts but must work as a team in a "peer-to-peer relationship," Jacobs said. In effect, ABN Amro has created an "internal market" for contracting application development work globally, he explained.

To manage the different service providers, ABN Amro kept overall IT management and strategic planning internal and assembled IT teams with people who have strong business knowledge, Jacobs said.

The bank has also established subject-matter experts -- staffers who are highly experienced, for instance, in how payment or trading systems function. They work with ABN Amro's IT architects and relationship management staffers to help ensure that the bank's systems meet business needs, according to Jacobs. In addition, ABN Amro has created a requirements analyst job function with responsibility for turning business requirements into technical specifications for the outsourcing vendors. And just to be safe, it has retained some in-house coding capabilities "as insurance," Jacobs said.

Du Pont signed an outsourcing contract with Computer Sciences Corp. in 1997 and now also has deals with Accenture and other vendors.

Maryann Holloway, director of alliance management and operations at the Wilmington, Del.-based chemical company, said it's important "that both sides understand what their roles are and what they are going to deliver" as part of an outsourcing relationship.

To help ensure that the outsourcing vendors it works with meet its services delivery requirements, Du Pont has retained all of its top IT management positions internally, Holloway said. The company tries to fill those jobs with experienced managers who are in the middle of their careers. "We really look for IT leadership skills," she said.

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Multisourcing Adds to IT Management Load

Outsourcing Leaders Fuse IT and Business Skills

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• Multisourcing Adds to IT Management Load
• Outsourcing Leaders Fuse IT and Business Skills

• At 10, Google reiterates commitment to CIOs
• iPhone 3G owner sues Apple, AT&T over dropped calls, app crashes
• Microsoft explains Seinfeld-Windows TV ad: just a 'teaser'
• More top stories 

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