Business Transformation Requires Transformational Leaders

One benefit of running executive education courses is that I get to talk with a large number of IT executives in a forum that encourages us to think about issues. A few months ago, I helped run one at the Massachusetts Institute of Technology that included more than 50 IT executives. During meals and coffee breaks, we spent a good deal of time talking about outsourcing and Web services. An interesting concept emerged. Outsourcing did more than cut costs. It also provided training and discipline that many companies had been sorely missing.

Although the US IT workforce has grown by 1% ... since the beginning of the year, the short-term hiring outlook continues to remain bleak ... [jobless] IT professionals [with] in-demand skills ... point the finger at H-1B visa holders and offshore programming outfits, where a growing number of companies are shifting their development and maintenance work to reduce costs.

-- Thomas Hoffman, ComputerWorld, 23 September 2002

A recent risk management conference reminded me of James Carville's admonition to the Clinton campaign in 1992 about it being the economy, stupid! The presentations focused on processes and methods as have other similar conferences and articles. This misses the point. The introduction of risk management to an organization is primarily a change in behavior.

Imagine that you were going to build an IT outsourcing process from the ground up -- that is, you didn't have to deal with existing constraints or "the way we've always done it around here." How would you do it? What capabilities would be critical to maintain a high degree of outsourcing success and ongoing business customer satisfaction?

As outsourcing has evolved over the past 10 years, many new trends have developed. Client companies have become more adept at maximizing the value received through outsourcing using a number of methods.