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French Version

Outsourcing IT ?

There’s always a lot of talk about information technology outsourcing, but its a ‘revolution’ that is happening gradually.

However, as the IT boom ended, or rather when the IT industry went back to more modest growth figures, outsourcing became a more attractive option for company’s aiming to save money, in the long-term.

IT departments in some organizations include a complete team, which may be necessary to handle IT functions related to the company’s core business. However, side-business matters do not need in-house staff; such as designing, maintaining and updating the company’s website. Until the website actually becomes a store-front (sales point) for the company’s products and services, there is no need to hire employees, pay fixed salaries with medical and health benefits and generally increase your overhead costs. So, outsourcing to a web design consultancy is the wise move.

Canceling an outsourcing contract is easy, and involves few moral obligations or emotional issues. Whereas, firing an IT staff member, when the economy isn’t doing so well, after many years of working for you is an emotionally and legally costly affair.

This is the major reason, in the US and European markets, that outsourcing is gaining momentum.

In fact, companies today are taking it further with plans to outsource other activities too.

Can you imagine a bank outsourcing its IT department? Maybe not, but it happened recently in Holland. ABN Amro, one of the world’s largest banks, outsourced its IT operations to EDS for the next five years. IBM recently won an outsourcing contract for Bank of America’s IT operations for the next 10 years!

An even, more interesting deal IBM has signed is J.P. Morgan Chase, that involves the transfer of 4,000 staff members and contractors from J.P. Morgan Chase’s payroll to IBM’s; effectively turning in-house IT professionals into outsourcing professionals! Surely, these agreements are a sign of things to come in our part of the world. Analysts in the United States are predicting that this will be the ‘outsourcing decade’, and not just in developed IT markets. By 2010, it is expected, the majority of IT operations will be outsourced and the companies that outsource their IT will have a skeleton staff of IT and project management professionals, probably liaising with the consultants!

If you’re keen on becoming an IT ‘outsourced consultant’, you need to start developing a solid track record in outsourcing management now, and there are software firms in Jordan who are handling outsourcing projects already. None of these projects is on a scale as grand as the examples of IBM or EDS handling a bank’s operations, but that might be happening within this decade in Jordan; especially with the entry of global players, who specialize in outsourcing like EDS. That could be good news for you, or any IT professional.

An analyst puts it into perspective, saying that IT spending is lower, but outsourcing is higher. Basically, what that means is that IT companies that offer outsourcing services will switch from selling hardware and software to ‘leasing its use’ through outsourcing.

The outsourcing revolution many have been waiting for has begun.

Amman,01 14 2003
Zeid Nasser
The Star
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