Business Transformation Requires Transformational Leaders

In the minds of some, the debate still rages: is e-business merely another overblown trend, or is it (as many analysts claim) a monumental change on the order of the industrial revolution?

The majority of this Executive Report focuses on a case study that traces the outsourcing process at Amtrak from its inception and, with the advantage of hindsight, relates the lessons the company has learned. It explores the impact of Amtrak's failure to adequately focus on the strategic benefits of outsourcing as a result of placing too much emphasis on tactical, short-term goals.

The accompanying Executive Report begins with an outsourcing case study and follows with a look toward the future of outsourcing. The case study starts with a history of the organization: Amtrak. US Congress passed the Rail Passenger Service Act in 1970, creating the National Passenger Railroad Corporation (Amtrak) to provide intercity rail passenger service in the US.

As outsourcing becomes entrenched as a means to deliver IT solutions, horror stories from vendor projects are becoming commonplace. The landscape is littered with multimillion dollar failures in which years of investment leave buyers with partially functioning systems or with the necessity of having multimillion dollar annuities to keep systems operating.

Although all Capability Maturity Model (CMM)-certified organizations follow the same practices, there can be wide variance in how these organizations operate. CMM is not just about following certain key practices; it must also include a learning-oriented cultural identity. Thus, it's important to carefully question any potential outsourcing partner about its software process status -- beyond simply asking its CMM level.

Centralizing a corporation was once considered an efficient way to run an enterprise. Decisions and information processing occurred in an orderly, top-down, hierarchical manner.