Skills Play Catch-up

In his three years of experience with offshoring, David Baruch has contracted with two different service providers, and he’s in the process of gearing up to switch to a third. As CIO at Equity Office, he has found that these frequent changes have helped him develop what is increasingly considered an important competency: the ability to successfully find, engage and manage global sourcing providers.

“Clients are becoming more sophisticated and thinking about [outsourcing] more proactively,” says Gregg Kirchhoefer, a partner at Kirkland & Ellis LP in Chicago. For instance, he says, they’re creating offices of strategic sourcing and appointing chief sourcing officers, sometimes as an outgrowth of the procurement function. “They’re seeking opportunities for improving processes, effecting change and getting a better overall return,” Kirchhoefer says.

As part of this evolution, organizations such as the International Association of Outsourcing Professionals now award certification to outsourcing professionals who can demonstrate skills in aligning outsourcing with corporate strategy, identifying the right opportunities for outsourcing, and structuring outsourcing arrangements.

Other relevant skills include the ability to implement processes for offshoring, sustain desired service levels, create and collect metrics, and ensure that everyone sticks to contract terms, says Danny Siegel, director of data warehousing and business intelligence technologies at Pfizer.

“I’m starting to see a desire for effective vendor management — the ability to broker these deals and make them fly,” he says. “If you can find vendors with the right resources — and that don’t bother you with geographic concerns like immigration issues — that’s a personal competence.”

According to Gartner, there are six requirements for successfully managing an outsourcing relationship:

Setting overall objectives, priorities, policies and procedures that make the agreement work.

Identifying capabilities needed for the business, and selecting appropriate service providers.

Building and maintaining disciplined cooperation among all the service providers and the company.

Controlling commercial arrangements like funding, pricing and billing, as well as the ownership of assets and intellectual property.

Monitoring the performance of all the stakeholders (not just service providers) against agreed-upon targets.

Ensuring regular reporting, capturing lessons learned and providing the information needed for short-term corrections and long-term enhancements.

Right now, such competencies are hard to find. According to a recent survey of 530 U.S. and European companies by Duke University and consultancy Booz Allen Hamilton, one of the most significant challenges of offshoring for CIOs is the lack of people with the skills to manage an offshore workforce.

“Often, IT managers are too technical or do not have appropriate multicultural and multinational experience to successfully manage offshore employees,” says Vinay Couto, a principal at Booz Allen.

That’s why IT professionals with these skills will find themselves in increasing demand. As Siegel says, “The technology management folks are becoming the real secret sauce in this equation.”

Copyright © 2007 IDG Communications, Inc.

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