Outsourcing fatigue: Why CIOs have gone from fans to fed up

Steve Ranger's Notebook: Three reasons IT chiefs worry about outsourcing - and a silver lining...

...accepting IT is no longer an enabler - and that the board would prefer to get rid of it rather than make it relevant. For these CIOs it's a defeat because instead of being a source of opportunity, IT has become a problem to be fixed. And these are people who enjoy building teams, not breaking them up.

Thirdly, there is an increasing worry about what outsourcing - and particularly offshoring - means for the longer term health of the UK IT industry and the country in general.

That's because while outsourcing and offshoring may make sense for an individual organisation in cutting overall costs and a big chunk of capex too, when replicated across a country the effect on skills and employment can be quite different.

Several CIOs pointed to increasing youth unemployment, and worry how much their own actions in offshoring entry-level jobs are contributing to the problem. It's an issue that's worrying many. If UK businesses are giving the impression that IT is irrelevant and to be outsourced as cheaply as possible, why would anyone want to train for a job in IT?

I don't see outsourcing going away. Not all IT has to be done inhouse, and there are compelling economies of scale especially in commodity services - cloud is eating up a chunk of the IT department, too. But it might be that more nuanced, smarter hybrid approaches to outsourcing will become more popular.

And yet it's worth pointing out that, while these CIOs were depressed by outsourcing, they were still positive about the future of the IT organisation. Yes, it's likely the IT department will get steadily smaller because what was once complex will become simple - automated into the cloud or outsourced.

But the idea of driving innovation through technology isn't about to vanish - and having CIOs building brilliant teams of smart people who can come up with those ideas, and implement them, is going to be key.

Steve Ranger is the editor of silicon.com and has been writing about the impact of technology on people, culture and business for over a decade. You can find him tweeting @steveranger.

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