Its Management, Stupid

By Stan Gibson  |  Posted 2004-06-21 Print this article Print

"World-class companies outsource more and do it better." That's according to an analysis of IT benchmark results from The Hackett Group.

Lets see now, an outstanding company would get more value from IT and pay less for it, wouldnt it? Thats the not-so-surprising finding of The Hackett Group, which will soon publish its annual Book of Numbers analysis of its IT benchmark results, which are designed to reveal just what makes what it calls "world-class" organizations tick. The Hackett Groups findings indicate that world-class IT costs less and requires fewer staff per thousand users while providing higher strategic value to companies.

Just how does a company get more for less? "World-class companies outsource more and do it better. They manage to cut their overall costs significantly," said The Hackett Groups Beth Hayes, IT practice leader of the Atlanta-based company. Companies that dont perform so well use outsourcing to fix things they havent been able to fix themselves. This can lead to higher costs and still leave the problems unsolved, the Hackett study found. One intriguing finding: Effective companies outsource 60 percent more of their IT infrastructure but outsource 34 percent less of application management.

A key to outsourcing well is setting up a project management office that keeps an eye on the outsourcer and the work being done. Leading outsourcers understand the importance of close communication with the customer and the virtues of a customer monitoring them closely. In my recent interview with Brian Keane, the Keane Inc. president and CEO asserted that his customers, far from handing off their IT work to his company and having it disappear into a "black box," as it were, actually gain a better idea about whats going on in their IT operations than they had previously, thanks to a plethora of reports. To read the Keane interview, click here. Its all about vendor management, which Keane said must be a core competency of companies that outsource.

Next page: Out and about.

Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

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