Outsourcing may be best way to keep your IT staff
By Aoidin Scully
Outsourcing companies are positioning themselves to become 'virtual' IT departments. Depending on IT managers' approach, and their involvement with outsourcing decisions made at the executive level, the existing IT department could be either in the driver's seat or on a bus heading out of town.
Businesses are moving away from the notion that outsourcing means a particular activity is unimportant.
Nothing is further from the truth, say analysts. Outsourcing works best when it's seen not as abdicating responsibility, but as leveraging talent and resources.
Ultimately the IT manager should be involved in decisionmaking, since those decisions will affect both the current roles and the future responsibilities of the IT department.
"When we start an outsourcing project, if there's a pre-existing IT staff, we try to incorporate them into the project team," says Paul Toner, managing director of KPMG.
"They learn about the new technology and acquire new skills, so they'll be able to support the system at a later date and make any kind of small amendments. But they can still turn to their outsourcing partner for any assistance they may need."
Getting the existing staff involved in the outsourcing project is essential for a successful outsourcing relationship, he says.
Paul Ryan of Piercom says: "Outsourcing doesn't take away the requirement to manage outsourced partners. I don't see that it threatens the IT manager in an organisation. It may change the role or it may present new opportunities for people, including moving into the service provider's organisation."
With most companies today desperately trying to hold on to the IT staff they have, the possibility of staff moving into the outsourcer's organisation many not be one they relish.
"It's a bit of a problem for companies all right," Toner says.
"When you get someone that's internal working on a project like this it makes it harder to retain that person.
"Their own organisation will be paying them normal IT salaries, but the guys will have learned new technologies and got much more marketable, so it's a catch-22 situation for most corporates."
Conor McWade, md of System Dynamics, says: "In many SME companies, the IT department is regarded as a cost rather than an investment, so they're trying to keep the lid on IT salaries.
"Any time anyone gets any real experience and has been trained up, they go off and earn more money elsewhere. More and more IT managers are now resigned to outsourcing, because they accept the fact that they can't get hold of the skills they require within the budget they require."
Previously, IT managers would have been one of the prime blockers of outsourcing, seeing it as a dilution of their responsibilities, says McWade. But IT managers today would manage not alone their own staff but their subcontractors and outsourcing partners, so the manager's role becomes invaluable to the company.
Paul Delaney, a director with DMR Consulting, is not so optimistic.
"I think there can still be an element of protectionism on the IT manager's side. The business guys, the chief financial officers or chief operating officers, are more than happy to admit that IT is not their core business and they'd be better off focusing on what is, but the guys who manage IT resources are pushing against that.
"They see it as a divestment of control on their part. And it's not sinking in that outsourcing frees them to do more interesting work."
Delaney believes that eventually there will be so much pressure on the departments to deliver projects that they will just have to relinquish control of non-core IT services.
Then IT managers who have invested time in nurturing a relationship with outsourcers may find that they reap the dividends.
Shunted from pillar to post, subject to the whims of various IT managers, and worse, the vagaries of a number of different bosses, why on earth would any qualified engineer want to work for an IT outsourcing company?
It is not all about the money -- though most of the outsourcing companies hinted that their employees were being handsomely rewarded for their efforts. The ability to progress within the organisation is also a major factor.
"If you're working at a baked bean company, and your job is in the computer department, where are you going to go? How are you ever going to get promoted?," says McWade. "But if you're working in an IT company, career progression is much more mainline."
Noel Brady says: "If you're an engineer in an non-IT company, from a career perspective your career is locked in. Most organisations still have a very limited career path."
Sx3 has initiated a 'job families' scheme where each staff member is categorised within a job family -- for instance, software integration, network administration, or desktop maintenance. Each family is assigned a grading structure in terms of pay rises and promotion.
"There are a number of steps within each family, so someone can be committed to junior engineer at point A and he knows if he can get to point B he gets an automatic pay rise," says Brady.
"It encourages people to progress along the path, learning as much as possible and working towards a goal. We encourage people to come forward and say 'I want to be an accredited system engineer' or whatever.
"When they do that, it's a straight arrangement, if they pass the accreditation agreement, their pay goes up."
Sx3 boasts an amazingly low turnover rate of 3 per cent, so the strategy must be working.
Smaller companies might not have the same resources.
"If you take the example of a company with 100 seats," says Brian Kinsella, "there are multiple levels of requirement in there, from the junior who needs to keep people working on their printers to a requirement at the high end for servers.
"But if they employed somebody at the high end who was able to manage the server infrastructure, that person would be too highly skilled to want to do the other stuff. So we sell them an engineer at the lower level, but also provide them with the ability to call in the senior people as needed.
"The junior person isn't getting bored -- he's getting enough work at his level -- but he's also secure because he knows that if things get out of hand, he can also call in the senior people. It's a good environment to work in."
The modern IT staff member might be in the office for one hour a week, and might be on site for several days thereafter working with different clients," says McWade.
"The key is because they're
working with different clients in different ways, they have a continual learning
curve, and continually interesting work. They're stimulated -- and also, of
course, well rewarded."