Business Outlook

While virtually every business now relies on information technology (IT) to help provide services or deliver products to the marketplace, things have rarely been more precarious for in-house IT professionals. This is so, despite the conventional wisdom that IT is acknowledged to be more strategic than ever.

Increased market competition, more demanding customers, tighter margins and shorter product life cycles have caused businesses to examine where they may be able to focus better on core competencies, reduce risk and costs, and become more agile and competitive. For many companies and small businesses across all industry segments, outsourcing IT is the only answer.

Outsourcing lowers operating costs, eliminates backlogs, improving data input quality, production and document availability. And, in the end, outsourcing adds profits to the bottom-line.

But outsourcing is far from a panacea. How an outsourcing relationship is managed – internally and externally – is as important to its ultimate success as the execution of the outsourced tasks themselves. Given that industry analyst Gartner recently reported that outsourcing can trigger an employee backlash, what do organizations need to know to make outsourcing a win-win for all concerned? How can a company best manage the firm that it has just retained? What project management issues does outsourcing solve and what challenges does it entail?