IN or OUT?  The Shape of IT Outsourcing in 2015


The Harvey Nash CIO Survey

The full Survey report on more than 3,000 CIOs and Technology leaders that were surveyed on their views on IT Outsourcing in 2015 since the recession of 2008 can be downloaded and read here. [et_bloom_locked optin_id=optin_3] Click here. [/et_bloom_locked]

Unique analysis from a Survey conducted by Harvey Nash Group across more than 3000 CIOs on IT Outsourcing in 2015
CIOs continued to outsource during the Great Recession of 2008, but at lower levels than prior. As the economy now improves we are now seeing a pickup in outsourcing once again with 2014 being a surge. HNinout2015

Key Findings From The Harvey Nash CIO Survey 2015 show the following:-

  • CIO intention to outsource has grown by 16 per cent since the depths of the recession in 2008
  • A third of CIOs will increase offshore investment in the next 12 months.
  • CIOs have evolved their post-recession approach to offshoring, demanding more responsiveness and access to new technology skills, as well as cost savings.
  • CIOs who outsource tend to be more global in outlook, work for larger organisations and are paid more.
  • For 65 per cent of CIOs, their remuneration is directly linked to the successful delivery of offshore projects. However, project expectations are not being met for a third of all CIOs; offshore providers need to ‘up their game’.
  • CIOs will continue to invest in outsourcing if their offshore providers are able to improve IT responsiveness, provide access to new technology skills AND deliver cost savings.

Not all CIOs think alike – but who do they report to?

When looking at the entire CIO population 32% report to the CEO, 19% to the CFO, 11% to the COO and 24% to some kind of higher-level IT head (for instance a group/global CIO). These reporting line proportions do not change significantly when you isolate CIOs looking to increase or decrease their outsourcing spend, in other words, the reporting line appears unrelated to tendency to outsource. CIO reports What does appear to change is whether the CIO is a member of the operational board. CIOs who look to increase outsourcing spend are 15% more likely to sit on the board than those looking to decrease spend, suggesting that outsourcing is seen as a strategic issue that needs the attention of the top team. We also asked CIOs what the main priorities of the board were. There was little difference between those CIOs who outsourced and those who didn’t; their top priorities were the same:-

  1. Operational efficiencies,
  2. Improving business processes, and
  3. Delivering stable IT.

Whilst it might be impossible to pick out an ‘outsourcing’ CIO from their peers just by the look of him or her, there are subtle differences. They are more likely to have a seat at the top table, as well as being personally held to account for their deliverables. They see their IT estate as a more flexible resource and scale their organisation up (and down) accordingly. Above all they, and their boss (who is most likely the CEO), see outsourcing as a tool that helps the company beyond just cost control, including helping it drive new sources of revenue. Read the full report click on the download on the left.