Catching Up With The CIO

“Doing more with less is a never-ending requirement and a constant challenge for our team,” Brady says. “We recently underwent a SAP upgrade that helps to reduce operating expenses, and we’ve also implemented other programs that focus on utilizing standards-based programs and applications instead of proprietary ones.” Standards-based programs rely on universal, easily manipulated computer code, making them more flexible, while proprietary programs run on copyrighted code.

One way organizations have found to keep costs down is making use of outsourcing and outside consultants to fill roles that had been performed internally. Companies have to be especially careful about outsourcing in the wake of recent reports, such as one from Texas-based technology business consultant TPI, saying that the oft-promised savings of up to 30 percent for IT departments that outsource may not materialize. Smart companies are the ones that carefully weigh which tasks and segments should be shipped outside.

McNulty says Schwan is especially choosy about sending any IT functions outside the company, preferring to take advantage of internal resources whenever possible. But occasional exceptions are made when the company feels contracting with outside expertise makes more sense than ramping up staff.

“Several years ago, our company established a software development partnership with [international IT outsourcing firm] Cognizant,” McNulty says. “We use their services to supplement our work force when demand exceeds supply. For other IT functions, we selectively source depending upon our internal knowledge and the ability to obtain the service externally. We recently completed a significant request-for-proposal effort to select the consultants we would be working with in the future, across all IT disciplines.”

Other CIOs also see outsourcing as a two-edged sword. “Outsourcing IT functions comes with many benefits and challenges,” Degeneffe says. Cost savings are frequently cited as the main advantage, while some companies avoid it in fear of security issues and compromised managerial control.

“But outsourcing is a important option for Deluxe,” he adds. “We have strong relationships with local and national technology providers.”

Offshore outsourcing is also an option for some organizations. Brady says ADC recently launched a successful privately owned offshore IT and business-process outsourcing operation in Bangalore, India, which does product development, testing, and maintenance.

“As with any outsourcing situation, process, procedures, and documentation were and continue to be the core challenges,” Brady says. “The IT organization is learning to work and collaborate in new ways to support business processes.”

“We outsource as many infrastructure services as we possibly can with tight vendor management,” Ross says. “Fortunately, we have a capable corporate parent, and have had success in migrating to CVS/Caremark’s infrastructure systems. We will not outsource innovation, so we are building a strong shop to manage projects and build, buy, and integrate new products.”