The vanishing IT department. Karl Nelson commented on my recent column and follow-up blog post about outsourcing basic IT services. Karl pointed to “The Vanishing IT Department,” an interesting read from Jerry Gregoire, the former CIO of Dell and Pepsico. (Some of Jerry Gregoire's other writing is here and there's an older piece about him here.) A brief excerpt:
There are three immutable and unpleasant truths about information technology staffing and retention that make outsourcing the dodge of choice for the incompetent and lazy: 1. Turnover is expensive; 2. Retention rate is the most accurate indicator of leadership quality; and 3. Recruiting is the hardest job an IT manager has.
Gregoire closes by saying:
So, what kind of IT organization do you aspire to have? If you yearn for adequate results on vanilla systems in pursuit of dial-tone regularity, forget about talent shortages and go find yourself a good contract lawyer. If, on the other hand, you still believe IT can make a competitive difference and that even the more mundane tasks can be a channel of competitive advantage given a little creative effort, then developing and retaining a professional organization should be your number-one goal. If it is, I thank you and wish you the very best.
I think this is too strongly worded. In my opinion, the job of the CTO or CIO is more generally to recognize top talent and try to leverage it for the benefit of their organizations. Sometimes that talent sits outside of your own organization within an outsourcer (and without a doubt, turnover with outsourcers is expensive just like people turnover). No IT organization of any size can maintain the highest level of expertise in everything. I also think that some “mundane tasks” will never make a competitive difference no matter how much “creative effort” is put behind them. Why would you ever want to do the IT behind payroll, for example, when you can outsource to companies like ADP? In the end, I think it's all about picking your outsourcing vs. insourcing battles. Outsourcing nothing seems as much an ill-informed strategy as outsourcing everything. There's a balance somewhere in between. [Chad Dickerson]