For outsourcers, a commitment to best practice processes is absolutely vital for success. They not only ensure that your business is offering best-of-breed services, but they also go a long way in reducing overall business costs and working capital by as much as 15 to 20 per cent. These result in a highly competitive enterprise, able to maintain growth while driving business-wide efficiencies.
Faced with a seemingly endless cycle of disruptive technology and increasingly inflexible budgets, IT executives have their work cut out when it comes to making decisions about how to improve operations and meet demanding business needs without driving costs up. Today's heavy-handed drive for cost savings necessitates that IT services are demonstrably aligned with business priorities.
Budgeting for IT has always been an uphill battle, with the boardroom tending to try and cut back on spending whenever possible, despite a driving desire for the competitive advantage strong tech investment brings. This is especially true for cybersecurity, which has always been hobbled by the difficulty in proving its day-to-day value. It’s only when an attempted attack occurs that the value of security investment overtakes the “it won’t happen to us” mentality.
Respondents to our latest CIO and IT Leadership survey are reporting a 40% increase in their IT budget, over the past year. However there is something really interesting in the underlying data which suggests that the pressure to commoditise is like never before: IT budgets that have given back savings year on year are still under pressure for a more cost-effective solution. So why do we see this discrepancy? The answer lies in one of the fundamental parts of the survey: two-speed IT.
As companies have started to internalise (and for that matter, practice) the triple bottom line concept of sustainability, the focus now has shifted to issues beyond their walls of operations and manufacturing. In the world of outsourcing, globalisation and interdependence of suppliers, companies must look into making their supply chains more sustainable.
There is a fiction that suggests that business decisions are made on purely utilitarian grounds. Psychologists have shown convincingly that people value the avoidance of loss far more highly than capturing gains. There are many and significant implications for those seeking to implement change, particularly in an agile environment.
The Agile Manifesto
Pulling into the snowy parking lot and contemplating today’s meeting, my mind wandered to a line from Michael Margolis, the CEO of Get Storied, “If you want to understand the culture, listen to the stories; if you want to change the culture, change the stories.” Carl, the site manager of Excel, the inside-outsourcing service provider at this motorcycle plant, had called a few weeks back and enticed me to visit by stating, “I have a great story for you.”
Next up in my series of columns about the great academic thought leaders who were seminal in the development and success of modern outsourcing are two of my favorite game theorists: the mathematician and Nobel laureate John F. Nash, who took economists a step or two beyond Adam Smith with his ideas on game theory and the art of collaborating, or playing together nice, for the win-win; and Robert Axelrod, who verified the beauty of cooperation through his early work with computers to solve a classic game theory behavioral experiment.