Outsourcing Essay

2086 words - 8 pages

ArticlesLife After Outsourcing by Meredith LevinsonMay 15, 2004 Issue of CIO MagazineHow to Outsource-Proof Your IT DepartmentA New Game Plan by Christopher KochOct. 15, 2004 Issue of CIO MagazineThe Inner Cost of Outsourcing,Sticking with the Home Team, andOne Outsources, The Other Doesn't by Stephanie OverbyNov. 1, 2004 Issue of CIO MagazineYou Can't Outsource Everything by Goeff SmithNov. 1, 2004 Issue of CIO MagazineSummaryOutsourcing is getting a lot of attention lately in the news and in corporate boardrooms. More and more companies are exploring outsourcing as a way to reduce costs, increase productivity and maintain competitive advantage. On the human side, IT professionals are concerned about the trend to offshore help desk and programming jobs especially when the financial headlines boast of record corporate profits and a jobless recovery. I chose two articles that take a different approach toward outsourcing and I reference a series of supporting articles from an issue of CIO pretty much dedicated to the subject from November 2004.The first article "Life After Outsourcing" by Meredith Levinson explores the effect of outsourcing at Nextel Communication. Nextel had posted a $1.8 billion loss in 1998 and management felt it had to take some decisive steps to improve its sagging bottom line. Dick LaFave was brought in as the new senior vice president and CIO to help make the transition. He knew exactly what he was getting into since he had led outsourcing deals with his two previous employers, Southern New England Telephone and The Boston Co.Over the next two years (2000 - 2002) Nextel outsourced approximately 290 of its 700 IT employees to Amdocs to run its billing system; EDS to take over desktop and help desk support, network management, and data center operations; and IBM to manage Nextel's call center. They kept project management, application development, and testing in-house.The article explores Nextel's transition from four different perspectives - the CIO, the VP of customer billing, the manager of IT operations, and the outsourced employee.Dick LaFeve doesn't describe himself as a "touchy-feely guy" but he was sensitive to the difficult time people were going to go through as they made this transition. He believed that the right way to handle it was to be honest and communicate from the outset. He welcomed everyone into his office and did his best to explain why he made the decision he did although the matter was not a subject for debate. Anyone familiar with business process reengineering (BPR) knows that many of these types of transitions come as the result of a financial crisis, they have strong CEO approval and are therefore top down, by their nature they require dramatic transformations, and in the spirit of Machiavelli they leave no detractors. It isn't clear from the article whether IT had anything to do with Nextel's sagging bottom line but that isn't likely. However, the lives of the 700 people in IT changed significantly...

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