Right Sourcing and Cloud Computing - Getting the Mix Right

On September 15th, the AITP Atlanta Chapter hosted its fifth annual CIO Roundtable Dinner at the beautiful Crown Plaza Ravinia in Dunwoody, Ga., the chapter’s new meeting facilities. This year’s event provided valuable insights into the ways in which Atlanta’s information technology leaders are addressing major trends facing IT departments today. The CIO’s represented a broad cross section of Atlanta’s leading technology-focused organizations with perspectives for global, public sector, and smaller entrepreneurial IT shops as well. In this article, the CIO’s discuss their organizations’ use of right sourcing and cloud computing.  Two upcoming articles will cover the “consumerization” of IT, and the security issues surrounding these initiatives, and what CIO’s consider in making hiring decisions.

From Left to Right: Danny Bensley (Hardin Construction); Curtis Rawlings (Dekalb County); Karen Painter (Turner); Bill Smith (Chamberlin Edmonds); Edwin Marcial (InterContinental Exchange); Dudley White (Equifax (TAS)); Alan Stukalsky (Randstad)

Each of the CIO’s present weighed in on the pros and cons of outsourcing and discussed strategies for achieving the right balance.  Most agreed that, in the past several years since outsourcing began to change the IT business model, we have gained a better perspective on how to achieve the right mix of in-house resources and outsourcing.  “I think many companies have run really far to the right as far as outsourcing,” said Dudley White, CIO for Equifax (TAS).  “What you see now is a kind of correction as we bring back in house certain key activities and functions.”

 
Curtis Rawlings, Assistant CIO for DeKalb County Georgia, agreed: “We’ve rushed as an industry one way, now we’re kind of pulling back because it just doesn’t work for every situation.  We use outsourcing for efficiency and cost savings, but I have to make sure that when we’ve outsourced development, we can support it internally.” “In the past, it was really about pricing pressures,” continued Alan Sukalsky.  “Today, with outsource offerings from LatinAmerica, China, and other geographies, it’s more about quality.”

Often the decision to use outsourcing is dependent upon the type of software service and business involved.  Alan Stukalsky, CIO for Randstad Corporation pointed out that, in his company’s Professional business sector, they do more outsourcing because they need to complete projects fast and ramp up quickly.  “Our IT team is split in two,” he says.   Because we have differences in what we want to own and what is our intellectual capital.  On our General Staffing business, we do more [of our development] in house.”

Karen Painter, Senior VP of Enterprise Applications for Turner Broadcasting System, also strives to determine the right mix.  “We certainly have plenty of software services where outsourcing makes sense,” she says.    “Within our expense reporting and some of our benefits package services, for example we’re looking at outsourcing for the purpose of staff augmentation.  In our industry however, there are many areas where no products are available for purchase on the market.  In these areas, we have development efforts going on that are core to our business.  Some of these, we believe, give us a competitive advantage, and these we’re not going to outsource.”

Bill Smith, CIO for Chamberlin Edmonds added another perspective:  “we are a relatively small company that was recently acquired by a much larger company who has been outsourcing for many years.  Now we’re in the process of transitioning from a small entrepreneurial type staff to supplementing it and augmenting it with outsourcing.  What we’re trying to do is figure out how you get it right.  How do you do the support?  What do you outsource?  Do you [outsource] the support requirements, the overnight monitoring of all the jobs, or do you do your development offshore?  We’re really trying to take the development requirements and get things right.”

Danny Bensley, CIO of Hardin Construction commented: “Over the past several years we’ve experienced a huge downturn in the construction industry so my staff is much smaller than it used to be.  We can’t slow down though.  We have to consider new technologies; we have to figure out how to implement them.  I personally have looked to outside sources more than ever.  What I look for is ‘can I can get knowledge transfer out of that?’  We’ve got to have some knowledge transfer to our people in house.  It’s all about lack of resources.  It’s about budgeting.”

Regardless of their current levels of outsourcing, all the CIO’s were looking to cloud computing for cost savings and efficiency improvements.  Referred to by the Gartner Group, an independent IT research firm, as “2010’s biggest IT buzz word”, cloud computing is still in it’s earliest stages for many of the companies represented at this year’s event.  Edwin Marcial, Chief Technology Officer for InterContinental Exchange pointed out:  “We’re using cloud computing but our industry as a whole is not really there yet.  A lot of our customers are large financial institutions and they’re not quite ready to have their data in the cloud.  Our developers are using the cloud to set up and conduct performance test environments.  So far, we’re approaching this from an efficiency perspective.”  

Curtis Rawlings added, “my infrastructure guys told me I needed additional storage.  That’s where I look to the cloud for storage on demand.  I don’t want to buy it, I want to lease it, and then give it up.”

About the CIO Roundtable

When John Kosar, CCCi Client Manager and former AITP President conceived the CIO Roundtable five years ago, his intention was to help foster direct interaction between leading Atlanta CIO’s and AITP members and students.  “This has been an excellent way to gain a dialogue between all levels of our IT community,” said Kosar.  “In these annual dinner events, AITP members enjoy meeting and talking directly with the CIOs.   We work hard to come up with questions that are professionally relevant to all of our members.”  This year’s event was particularly relevant with topics that are currently on the minds of most IT professionals.  Please stay tuned for upcoming articles in this series with more insights into the ways in which Atlanta CIOs are currently managing some of the world’s leading IT organizations.