What is outsourcing? Definitions, best practices, challenges ...

Outsourcing is a business practice in which services or job functions are farmed out to a third party. In information technology, an outsourcing ... g UnitedStatesEdition Edition UnitedStates Africa ASEAN Australia Canada India Ireland MiddleEast Netherlands NewZealand UnitedKingdom Events Newsletters WhitePapers/Webcasts Brandposts Community Blogs Podcasts CIO100Awards CIODigitalMagazine CIOLeadershipLive CIOThinkTank Analytics Careers CloudComputing DigitalTransformation DiversityandInclusion EnterpriseApplications Innovation ITLeadership ITManagement ITOperations ITStrategy ProjectManagement Skiptocontent Home Thinkstock Whatisoutsourcing? Outsourcingisabusinesspracticeinwhichservicesorjobfunctionsarefarmedouttoathirdparty.Ininformationtechnology,anoutsourcinginitiativewithatechnologyprovidercaninvolvearangeofoperations,fromtheentiretyoftheITfunctiontodiscrete,easilydefinedcomponents,suchasdisasterrecovery,networkservices,softwaredevelopmentorQAtesting. CompaniesmaychoosetooutsourceITservicesonshore(withintheirowncountry),nearshore(toaneighboringcountryoroneinthesametimezone),oroffshore(toamoredistantcountry).Nearshoreandoffshoreoutsourcinghavetraditionallybeenpursuedtosavecosts. [ Discoverthesecretsofemployeeretention,whygoodemployeesleave(andhowtopreventit),andthebestdiversityandinclusionpracticesforchangingyourculture. ] [DiscoverthelatestIToutsourcingtrends,thetopIToutsourcingserviceproviders,andthe11keystoasuccessfuloutsourcingrelationship.|Bewarethesecommonoutsourcingmyths,mistakes,andhiddencosts|SignupforourCIOnewsletter.] Outsourcingbenefitsandcosts Thebusinesscaseforoutsourcingvariesbysituation,butthebenefitsofoutsourcingoftenincludeoneormoreofthefollowing: lowercosts(duetoeconomiesofscaleorlowerlaborrates) increasedefficiency variablecapacity increasedfocusonstrategy/corecompetencies accesstoskillsorresources increasedflexibilitytomeetchangingbusinessandcommercialconditions acceleratedtimetomarket lowerongoinginvestmentininternalinfrastructure accesstoinnovation,intellectualproperty,andthoughtleadership possiblecashinfluxresultingfromtransferofassetstothenewprovider Someoftherisksofoutsourcinginclude: slowerturnaroundtime lackofbusinessordomainknowledge languageandculturalbarriers timezonedifferences lackofcontrol Outsourcingservices Businessprocessoutsourcing(BPO)isanoverarchingtermfortheoutsourcingofaspecificbusinessprocesstask,suchaspayroll.BPOisoftendividedintotwocategories:back-officeBPO,whichincludesinternalbusinessfunctionssuchasbillingorpurchasing,andfront-officeBPO,whichincludescustomer-relatedservicessuchasmarketingortechsupport.Informationtechnologyoutsourcing(ITO),therefore,isasubsetofbusinessprocessoutsourcing. Whilemostbusinessprocessoutsourcinginvolvesexecutingstandardizedprocessesforacompany,knowledgeprocessoutsourcing(KPO)involvesprocessesthatdemandadvancedresearchandanalytical,technicalanddecision-makingskillssuchaspharmaceuticalR&Dorpatentresearch. IToutsourcingclearlyfallsunderthedomainoftheCIO.However,CIOsoftenwillbeaskedtobeinvolvedin—orevenoversee—non-ITObusinessprocessandknowledgeprocessoutsourcingeffortsaswell.CIOsaretappednotonlybecausetheyoftenhavedevelopedskillinoutsourcing,butalsobecausebusinessandknowledgeprocessworkbeingoutsourcedoftengoeshandinhandwithITsystemsandsupport. Formoreonthelatesttrendsinoutsourcing,see“7hotIToutsourcingtrends—and7goingcold.” OutsourcingITfunctions Traditionally,outsourcedITfunctionshavefallenintooneoftwocategories:infrastructureoutsourcingandapplicationoutsourcing.Infrastructureoutsourcingcanincludeservicedeskcapabilities,datacenteroutsourcing,networkservices,managedsecurityoperations,oroverallinfrastructuremanagement.Applicationoutsourcingmayincludenewapplicationdevelopment,legacysystemmaintenance,testingandQAservices,andpackagedsoftwareimplementationandmanagement. Intoday’scloud-enabledworld,however,IToutsourcingcanalsoincluderelationshipswithprovidersofsoftware-,infrastructure-,andplatforms-as-a-service.Infact,cloudservicesaccountforasmuchasonethirdoftheoutsourcingmarket,asharethatisdestinedtogrow.Theseservicesareincreasinglyofferednotonlybytraditionaloutsourcingprovidersbutbyglobalandnichesoftwarevendorsorevenindustrialcompaniesofferingtechnology-enabledservices. IToutsourcingmodelsandpricing TheappropriatemodelforanITserviceistypicallydeterminedbythetypeofserviceprovided.Traditionally,mostoutsourcingcontractshavebeenbilledonatimeandmaterialsorfixedpricebasis.Butasoutsourcingserviceshavematuredfromsimplybasicneedsandservicestomorecomplexpartnershipscapableofproducingtransformationandinnovation,contractualapproacheshaveevolvedtoincludemanagedservicesandmoreoutcome-basedarrangements. Themostcommonwaystostructureanoutsourcingengagementinclude: Timeandmaterials:Asthenamesuggests,theclientspaystheproviderbasedonthetimeandmaterialusedtocompletethework.Historically,thisapproachhasbeenusedinlong-termapplicationdevelopmentandmaintenancecontracts.Thismodelcanbeappropriateinsituationswherescopeandspecificationsaredifficulttoestimateorneedsevolverapidly. Unit/on-demandpricing:Thevendordeterminesasetrateforaparticularlevelofservice,andtheclientpaysbasedonitsusageofthatservice.Forinstance,ifyou’reoutsourcingdesktopmaintenance,thecustomermightpayafixedamountpernumberofdesktopuserssupported.Pay-per-usepricingcandeliverproductivitygainsfromdayoneandmakescomponentcostanalysisandadjustmentseasy.However,itrequiresanaccurateestimateofthedemandvolumeandacommitmentforcertainminimumtransactionvolume. Fixedpricing:Thedealpriceisdeterminedatthestart.Thismodelcanworkwellwhentherearestableandclearrequirements,objectives,andscope.Payingafixedpricedforoutsourcedservicescanbeappealingbecauseitmakescostspredictable.Itcanworkoutwell,butwhenmarketpricinggoesdownovertime(asitoftendoes),afixedpricestaysfixed.Fixedpricingisalsohardonthevendor,whichhastomeetservicelevelsatacertainpricenomatterhowmanyresourcesthoseservicesenduprequiring. Variablepricing:Thecustomerpaysafixedpriceatthelowendofasupplier’sprovidedservice,butthismethodallowsforsomevarianceinpricingbasedonprovidinghigherlevelsofservices. Cost-plus:Thecontractiswrittensothattheclientpaysthesupplierforitsactualcosts,plusapredeterminedpercentageforprofit.Suchapricingplandoesnotallowforflexibilityasbusinessobjectivesortechnologieschange,anditprovideslittleincentiveforasuppliertoperformeffectively. Performance-basedpricing:Thebuyerprovidesfinancialincentivesthatencouragethesuppliertoperformoptimally.Conversely,thistypeofpricingplanrequiressupplierstopayapenaltyforunsatisfactoryservicelevels.Performance-basedpricingisoftenusedinconjunctionwithatraditionalpricingmethod,suchastime-and-materialsorfixedprice.Thisapproachcanbebeneficialwhenthecustomerscanidentifyspecificinvestmentsthevendorcouldmakeinordertodeliverahigherlevelofperformance.Butthekeyistoensurethatthedeliveredoutcomecreatesincrementalbusinessvalueforthecustomer,otherwisetheymayenduprewardingtheirvendorsforworktheyshouldbedoinganyway. Gain-sharing:Pricingisbasedonthevaluedeliveredbythevendorbeyonditstypicalresponsibilitiesbutderivingfromitsexpertiseandcontribution.Forexample,anautomobilemanufacturermaypayaserviceproviderbasedonthenumberofcarsitproduces.Withthiskindofarrangement,thecustomerandvendoreachhaveskininthegame.Eachhasmoneyatrisk,andeachstandstogainapercentageofprofitsifthesupplier’sperformanceisoptimumandmeetsthebuyer’sobjectives. Sharedrisk/reward:Providerandcustomerjointlyfundthedevelopmentofnewproducts,solutions,andserviceswiththeprovidersharinginrewardsforadefinedperiodoftime.Thismodelencouragestheprovidertocomeupwithideastoimprovethebusinessandspreadsthefinancialriskbetweenbothparties.Italsomitigatessomerisksbysharingthemwiththevendor.Butitrequiresagreaterlevelofgovernancetodowell. ITorganizationsareincreasinglylookingforpartnerswhocanworkwiththemastheyembraceagiledevelopmentanddevopsapproaches.“Organizationsarerapidlytransformingtoagileenterprisesthatrequirerapiddevelopmentcyclesandclosecoordinationbetweenbusiness,engineeringandoperations,”saysSteveHall,apartnerwithsourcingconsultancyInformationServicesGroup(ISG).“Globaldeliveryrequiresagloballydistributedagileprocesstobalancetheneedforspeedandcurrentcostpressures.” Outsourcingandjobs Thetermoutsourcingisoftenusedinterchangeably—andincorrectly—withoffshoring,usuallybythoseinaheateddebate.Butoffshoring(or,moreaccurately,offshoreoutsourcing)isasubsetofoutsourcingwhereinacompanyoutsourcesservicestoathirdpartyinacountryotherthantheoneinwhichtheclientcompanyisbased,typicallytotakeadvantageoflowerlaborcosts.Thissubjectcontinuestobechargedpoliticallybecauseunlikedomesticoutsourcing,inwhichemployeesoftenhavetheopportunitytokeeptheirjobsandtransfertotheoutsourcer,offshoreoutsourcingismorelikelytoresultinlayoffs. Estimatesofjobsdisplacedorjobscreatedduetooffshoringtendtovarywidelyduetolackofreliabledata,whichmakesitchallengingtoassesstheneteffectonITjobs.Insomecases,globalcompaniessetuptheirowncaptiveoffshoreITservicecenterstotoreducecostsoraccessskillsthatmaynotresultinnetjoblossbutwillshiftjobstooverseaslocations. Somerolestypicallyoffshoredincludesoftwaredevelopment,applicationsupportandmanagement,maintenance,testing,helpdesk/technicalsupport,databasedevelopmentormanagement,andinfrastructuresupport. Inrecentyears,ITserviceprovidershavebegunincreasinginvestmentsinITdeliverycentersintheU.S.withNorthAmericanlocationsaccountingformoretheathirdofnewdeliverysites(29outofatotalof76)establishedbyserviceprovidersin2016,accordingtoareportfromEverestGroup,anITandbusinesssourcingconsultancyandresearchfirm.Demandfordigitaltransformation–relatedtechnologiesspecificallyisdrivinginterestincertainmetropolitanareas.OffshoreoutsourcingprovidershavealsoincreasedtheirhiringofU.S.ITprofessionalstogirdagainstpotentialincreasedrestrictionsontheH-1BvisastheyusetobringoffshoreworkerstotheU.S.toworkonclientsites. SomeindustryexpertspointoutthatincreasedautomationandroboticcapabilitiesmayactuallyeliminatemoreITjobsthanoffshoreoutsourcing. Thechallengesofoutsourcing Outsourcingisdifficulttoimplement,andthefailurerateofoutsourcingrelationshipsremainshigh.Dependingonwhomyouask,itcanbeanywherefrom40to70percent.Attheheartoftheproblemistheinherentconflictofinterestinanyoutsourcingarrangement.Theclientseeksbetterservice,oftenatlowercosts,thanitwouldgetdoingtheworkitself.Thevendor,however,wantstomakeaprofit.Thattensionmustbemanagedcloselytoensureasuccessfuloutcomeforbothclientandvendor. Anothercauseofoutsourcingfailureistherushtooutsourceintheabsenceofagoodbusinesscase.Outsourcingpursuedasa“quickfix”cost-cuttingmaneuverratherthananinvestmentdesignedtoenhancecapabilities,expandglobally,increaseagilityandprofitability,orbolstercompetitiveadvantageismorelikelytodisappoint. Generallyspeaking,risksincreaseastheboundariesbetweenclientandvendorresponsibilitiesblurandthescopeofresponsibilitiesexpands.Whateverthetypeofoutsourcing,therelationshipwillsucceedonlyifboththevendorandtheclientachieveexpectedbenefits. Seealso:“9IToutsourcingmistakestoavoid”and“10earlywarningsignsofIToutsourcingdisaster.” Servicelevelsagreements Aservicelevelagreement(SLA)isacontractbetweenanITservicesproviderandacustomerthatspecifies,usuallyinmeasurableterms,whatservicesthevendorwillfurnish.Servicelevelsaredeterminedatthebeginningofanyoutsourcingrelationshipandareusedtomeasureandmonitorasupplier’sperformance. Often,acustomercanchargeavendorapenaltyfeeifcertainSLAsarenotmet.Usedjudiciously,that’saneffectivewaytokeepavendoronthestraightandnarrow.ButnoCIOwantstobeinthebusinessofpenalty-chargingandcollecting.Badservicefromanoutsourcingvendor,evenatadeepdiscount,isstillbadservice,andcanleadtogreaterproblems.It’sbesttoexpendenergyonfindingoutwhytheSLAsarebeingmissedinthefirstplaceandworkingtoremedythesituation.StrongSLAsalonewillnotguaranteesuccesswhenoutsourcingITservices.They’reoneofmanytoolstohelpmanageanIToutsourcingdeal. Foramorein-depthdiscussionofSLAs,see“WhatisanSLA?Definition,bestpracticesandFAQs”and“10do’sanddon’tsforcraftingmoreeffectiveSLAs.” Outsourcingdeallengths What’sthebestlengthforaskirt?Whiletheoutsourcingindustryisnotquiteasfickleasfashion,theprevailingwisdomaboutthebestlengthforanoutsourcingcontracthaschangedovertheyears.Whenoutsourcingfirstemergedasaviableoption,longcontracts—asmanyas10yearsinlength—werethenorm.Assomeofthoseinitialdealslosttheirshine,clientsandvendorsmovedtoshortercontracts. Aswithmostquestionsaboutoutsourcing,theoptimalanswerdependsonwhat’sbeingoutsourcedandwhy.Whiledecade-longdealshavelargelygonebythewayside,atransformationaloutsourcingdealmayrequiremoretimetoreapbenefitsforbothclientandvendor.Butwhenoutsourcingdesktopmaintenanceordatacentersupport,ashorterrelationshipmayworkbetter.Generallyspeaking,overlylongcontracts(morethansevenyears)shouldbeavoidedunlessthereisagreatdealofflexibilitybuiltintothecontract. Formoreonoutsourcingcontracts,see“11keystoasuccessfuloutsourcingrelationship”and“7tipsformanaginganIToutsourcingcontract.” Choosingtherightoutsourcingproviderportfolio Manyyearsago,themulti-billion-dollarmegadealforonevendorhitanall-timehigh,andthebigITserviceprovidersoftheworldcouldn’thavebeenhappier.Butwholesaleoutsourcinghasproveddifficulttomanageformanycompanies.Thesedays,CIOshaveembracedthemulti-vendorapproach,incorporatingservicesfromseveralbest-of-breedvendorstomeetITdemands.MostmajorITservicesplayershavedonetheirbesttoadjusttothistrend.Infact,someleadingCIOsnotonlyworkwithacadreofcompetingoutsourcers,butexpectthemtomeetjointdeliverables. Multisourcing,however,isnotwithoutgreatchallenges.Thecustomermusthavematuregovernanceandvendormanagementpracticesinplace.Incontractnegotiations,CIOsneedtospelloutthatvendorsshouldcooperateandrefrainfromblamingeachother,orelserisklosingthejob.CIOsneedtofindqualifiedstaffwithfinancialaswellastechnicalskillstohelprunaprojectmanagementofficeorsomeotherbodythatcanmanagetheoutsourcingportfolio. TheriseofdigitaltransformationhasinitiatedashiftnotbacktomegadealsbutawayfromsiloedITservices.Ascompaniesembracenewdevelopmentmethodologiesandinfrastructurechoices,manystandaloneITserviceareasnolongermakesense.SomeITserviceprovidersseektobecomeone-stopshopsforclientsthroughbrokerageservicesorpartnershipagreements,offeringclientsafullspectrumofservicesfrombest-in-classproviders. Howtoselectaserviceprovider Selectingaserviceproviderisadifficultdecision.Butstartbyrealizingthatnooneoutsourcerisgoingtobeanexactfitforyourneeds.Trade-offswillbenecessary. Tomakeaninformeddecision,articulatewhatyouwantfromtheoutsourcingrelationshiptoextractthemostimportantcriteriayouseekinaserviceprovider.It’simportanttofigurethisoutbeforesolicitinganyoutsourcers,astheywillundoubtedlycomeinwiththeirownideasofwhat’sbestforyourorganization,basedlargelyontheirowncapabilitiesandstrengths. Someexamplesofthequestionsyou’llneedtoconsiderinclude: What’smoreimportanttoyou:thetotalamountofsavingsanoutsourcercanprovideyouorhowquicklytheycancutyourcosts? Doyouwantbroadcapabilitiesorexpertiseinaspecificarea? Doyouwantlow,fixedcostsormorevariablepriceoptions? Onceyoudefineandprioritizeyourneeds,you’llbebetterabletodecidewhattrade-offsareworthmaking. Traditionally,ITorganizationshavespentsixmonthstoayearormoreontheIToutsourcingtransactionprocess,findingtherightprovidersandnegotiatingasuitablecontract.ButasITservices—and,increasingly,as-a-service—dealshavegottenshorter,thatlengthyprocessmaynolongermakesense.Whiletheselectionprocessstilldemandsdiligence,therearesomemoreiterativetransactionprocessesthatcanreducethetimerequiredtoprocureITservices. Outsourcingadvisers Manyorganizationsbringinanoutsidesourcingconsultantoradvisertohelpfigureoutrequirementsandpriorities.Whilethird-partyexpertisecancertainlyhelp,it’simportanttoresearchtheadviserwell.Someconsultantsmayhaveavestedinterestedingettingyoutopursueoutsourcingratherthanhelpingyoufigureoutifoutsourcingisagoodoptionforyourbusiness.Agoodadvisercanhelpaninexperiencedbuyerthroughthevendor-selectionprocess,aidingtheminstepslikeconductingduediligence,choosingproviderstoparticipateintheRFPprocess,creatingamodelorscoringsystemforevaluatingresponses,andmakingthefinaldecision. Helpcanalsobefoundwithinyourorganization,fromwithinITandthebusiness.Thesepeoplecanhelpfigureoutyourrequirements.ThereisoftenareluctancetodothisbecauseanyhintofanimpendingoutsourcingdecisioncansendshiversthroughoutITandthelargerorganization.Butanecdotalevidencesuggeststhatbringingpeopleintothedecision-makingprocessearlierratherthanlatermakesforbetterchoicesandalsocreatesanopennessaroundtheprocessthatgoesalongwaytowardallayingfears. Formoreadvice,see“Outsourcingadvisors:6tipsforselectingtherightone.” Negotiatingthebestoutsourcingdeal Theadvicegivenaboveforselectingaproviderholdstruefornegotiatingtermswiththeoutsourceryouselect.Athird-partyservicesproviderhasonethinginmindwhenenteringnegotiations:makingthemostmoneywhileassumingtheleastamountofrisk.Clearlyunderstandingwhatyouwanttogetoutoftherelationshipandkeepingthatthefocusofnegotiationsisthejobofthebuyer.Balancingtherisksandbenefitsforbothpartiesisthegoalofthenegotiationprocess,whichcangetemotionalandevencontentious.Butsmartbuyerswilltaketheleadinnegotiations,prioritizingissuesthatareimportanttothem,ratherthanbeingledaroundbytheoutsourcer. Creatingatimelineandcompletiondatefornegotiationswillhelptoreininthenegotiationprocess.Withoutone,suchdiscussionscouldgoonforever.Butifaparticularissueneedsmoretime,don’tbeaslavetothedate.Takealittleextratimetoworkitout. Finally,don’ttakeanystepstowardtransitioningtheworktotheoutsourcerwhileinnegotiations.Anoutsourcingcontractisneveradonedealuntilyousignonthedottedline,andifyoubeginmovingtheworktotheoutsourcer,youwillbehandingovermorepoweroverthenegotiatingprocesstothemaswell. Outsourcing’shiddencosts ThetotalamountofanoutsourcingcontractdoesnotaccuratelyrepresenttheamountofmoneyandotherresourcesacompanywillspendwhenitsendsITservicesouttoathirdparty.Dependingonwhatisoutsourcedandtowhom,studiesshowthatanorganizationwillendupspendingatleast10percentabovethatfiguretosetupthedealandmanageitoverthelonghaul. Amongthemostsignificantadditionalexpensesassociatedwithoutsourcingare: thecostofbenchmarkingandanalysistodeterminewhetheroutsourcingistherightchoice thecostofinvestigatingandselectingavendor thecostoftransitioningworkandknowledgetotheoutsourcer costsresultingfrompossiblelayoffsandtheirassociatedHRissues costsofongoingstaffingandmanagementoftheoutsourcingrelationship It’simportanttoconsiderthesehiddencostswhenmakingabusinesscaseforoutsourcing. Theoutsourcingtransition VantagePartnersoncecalledtheoutsourcingtransitionperiod—duringwhichtheprovider’sdeliveryteamgetsuptospeedonyourbusiness,existingcapabilitiesandprocesses,expectationsandorganizationalculture—the“valleyofdespair.”Duringthisperiod,thenewteamistryingtointegrateanytransferredemployeesandassets,begintheprocessofdrivingoutcostsandinefficiencies,whilestillkeepingthelightson.Throughoutthisperiod,whichcanrangefromseveralmonthstoacoupleofyears,productivityveryoftentakesanosedive. Theproblemis,thisisalsothetimewhenexecutivesontheclientsidelookmostavidlyforthedeal’spromisedgains;businessunitheadsandlinemanagerswonderwhyITservicelevelsaren’timproving;andITworkerswonderwhattheirplaceisinthisnewmixed-sourceenvironment. ITleaderslookingtotheoutsourcingcontractforhelponhowtodealwiththeawkwardtransitionperiodwillbedisappointed.Thebestadviceistoanticipatethatthetransitionperiodwillbetrying,attempttomanagethebusinessside’sexpectations,andsetupmanagementplansandgovernancetoolstogettheorganizationoverthehump. Outsourcinggovernance Thesuccessorfailureofanoutsourcingdealisunknownonthedaythecontractisinked.Gettingthecontractrightisnecessary,butnotsufficientforagoodoutcome.Onestudyfoundthatcustomerssaidatleast15percentoftheirtotaloutsourcingcontractvalueisatstakewhenitcomestogettingvendormanagementright.Ahighlycollaborativerelationshipbasedoneffectivecontractmanagementandtrustcanaddvaluetoanoutsourcingrelationship.Anacrimoniousrelationship,however,candetractsignificantlyfromthevalueofthearrangement,thepositivesdegradedbythegreaterneedformonitoringandauditing.Inthatenvironment,conflictsfrequentlyescalateandprojectsdon’tgetdone. SuccessfuloutsourcingisaboutrelationshipsasmuchasitisactualITservicesortransactions.Asaresult,outsourcinggovernanceisthesinglemostimportantfactorindeterminingthesuccessofanoutsourcingdeal.Withoutit,carefullynegotiatedanddocumentedrightsinanoutsourcingcontractruntheriskofnotbeingenforced,andtherelationshipthatdevelopsmaylooknothinglikewhatyouenvisioned. Formoreonoutsourcinggovernance,see“7tipsformanaginganIToutsourcingcontract.” RepatriatingIT RepatriatingorbacksourcingITwork(bringinganoutsourcedservicebackin-house)whenanoutsourcingarrangementisnotworking—eitherbecausetherewasnogoodbusinesscaseforitinthefirstplaceorbecausethebusinessenvironmentchanged—isalwaysanoption.However,itisnotalwayseasytoextricateyourselffromanoutsourcingrelationship,andforthatreasonmanyclientsdissatisfiedwithoutsourcingresultsrenegotiateandreorganizetheircontractsandrelationshipsratherthanattempttoreturntothepre-outsourcedstate.But,insomecases,bringingITbackinhouseisthebestoption,andinthosecasesitmustbehandledwithcare. FormoreonrepatriatingIT,see“Howtobringoutsourcedservicesbackin-house.” Moreonoutsourcing: 7hotIToutsourcingtrends—and7goingcold Top10IToutsourcingproviders 11outsourcingmythsdebunked Thehiddencostsofoutsourcing 11keystoasuccessfuloutsourcingrelationship 9IToutsourcingmistakestoavoid 10earlywarningsignsofIToutsourcingdisaster 12signsyourstrategicpartnershiphasgonewrong 7keystotransformationaloutsourcingsuccess SLAguide:Bestpracticesforservice-levelagreements 10dosanddon’tsforcraftingmoreeffectiveSLAs Howtocontractforoutsourcingagiledevelopment Nextreadthis 10ITresolutionsfor2022 11liesCIOswilltellthemselvesin2022 ITleaders’top15takeawaysfrom2021 7hotITbudgetinvestments—and4goingcold 7enterprisearchitecturemistakestoavoid 13mostdifficult-to-fillITjobs 7hotdigitaltransformationtrends—and3goingcold 7ITmetricsthatmattermost 7toxicteambehaviorsITleadersmustrootout 10keyskillsforasuccessfulcloudstrategy Related: OutsourcingITStrategyITLeadership Author:StephanieOverby,Contributingwriter StephanieOverbyisaregularcontributortoCIO.com. RecentstoriesbyStephanieOverby: UkrainecrisisputsglobalIToutsourcingonedge 10hardtruthsofchangemanagement CIOchangeagents:LessonsfromthefrontlinesofITtransformations 9waysCIOswillfailtosupporthybridworkin2022 Top7challengesITleaderswillfacein2022 SponsoredLinks GetstartedwithAWSAppConfig FreetrialsarenowavailableforselectCISpre-hardenedVMsonAWS. DoyouhavewhatittakestobeaTransformativeCIO?LearnwhatITleadersaredoingtointegratetechnology,businessprocesses,andpeopletodrivebusinessagilityandinnovation. ImagineTransformingtheWayYourBusinessManagesData MessageyouremployeesonSlackwithcustomizedsecurityandcompliancerecommendationsfortheirLinux,Mac,andWindowsdevices.TryKolidefor14daysfree;nocreditcardrequired. Thenetworkbuiltforthefuture,andforyou.SeeCiscosolutions. WanttolearnhowtosimplifyyourIToperationswithautomationtechnologythatmeetsyourstandards.