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Governance and Outsourcing

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As we work with institutions and businesses of all sizes we come across many different models of IT Governance. In many cases, organizations address IT Governance as an IT initiative with reporting out to the business. We believe there are two components to IT Governance. The first is the demand for IT services coming from the organization. The second is the management of the technology, including starts control, within IT. Focusing on just IT misses the component that has the most impact on the ability to deliver IT services. The business should be prioritizing and validating that IT services are properly focused in the delivery to support institutional and business strategies. We have heard on numerous occasions: “Our appetite for projects is much bigger than our ability to deliver.” Addressing the IT component will not address this issue. This issue was addressed in a blog by Jim Ritchey previously. Focusing on the value of technology.

As budgets tighten, organizations look to deliver more at a reduced cost or to create an environment where activities are focused on strategic initiatives is to outsource portions of IT. When moving to outsourced services it is important to remember that the oversight and management of the outsourced work is the responsibility of the organization. In fact, outsourcing does not eliminate all resources and new skill sets maybe needed. Outsourcing without making the skill set changes is a recipe for disaster.

To achieve outsourcing success be certain:

  • The outsourced resource understands they are an extension of the core team
  • To apply the same type of governance and oversight to the outsourced activity
  • There is a shared understanding of the “what” and “why” of any work – just like in-house resource, outsourced workforce performs better when they understand the strategy and objectives
  • To agree to metrics that mimic internal measurements
  • Most importantly, business users understand what is being done by outsourced resource and why
  • That it is understood that the same technology risks you had internally still exist, but now you have added the risk of a vendor not successfully performing the services
  • To be open to conversations regarding what should or should not be moved out

The key is to make sure the skill sets are in place and the outsourcer is a part of both sides of IT Governance.

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