95% of IT professionals have seen their organizations redefine technology priorities following the Covid-19 outbreak.
The growing acceptance of remote working, the gaps being bridged through hybrid working models and new methods of workforce and asset management have also led to the resurgence of IT outsourcing.
So where do CEOs come in? A CEO’s job is never easy. The role is not just about organizational growth, but also about keeping it afloat, taking strategic decisions for resource allocations and more. With the changing market conditions CEOs also have to manage with limited resources and still strive to stay ahead. From setting priorities, identifying the right individuals to delegate tasks to and taking the last call on outsourcing certain processes or tasks, all fall on the CEO’s shoulders.
CEOs hold the power to change the IT space, resource modelling and other core systems. They balance all the decisions on the scale of progress, innovation and cost effectiveness. With IT outsourcing delivering significant advantages, CEOs of leading organizations have been using it tactically to enhance the internal performances. The key benefits include:
- Better Focus on core expertise and on critical projects
- Easy scaling to match customer requirements
- Significant cost reduction- right from hiring to retention.
But that is common knowledge.
The question lies in how CEOs use IT outsourcing to shore up their business. Here’s how.
Improving Core Competencies
Should the CEO/CTO spend time to resolve IT issues? Ideally no. IT outsourcing hence is a good way to re-direct business focus. Partnering with a specialist in the field gives CEOs more time to manage their business, working on the core product/service. The additional capacity also means better engagement with the customers and more attention towards the employees. CEOs hence can invest more time towards improving the core strengths, strategize, analyze the factors of success, and also work towards honing their own leadership skills. With each company creating a niche, IT outsourcing allows the organization to become an expert in its own specific industry.
With organizational growth and efficiency being the priority for CEOs, IT outsourcing gives the chance to focus more on the team performances by managing operational requirements. This means improved performance that doesn’t compromise on quality and business outcomes.
New partnerships also mean new markets. CEOs often approach outsourcing as a profit generation venture that can benefit both the company and the outsourcing partner.
According to a research conducted by IBM, “only about 27% of companies use outsourcing in an effort to cut their own costs during the expansion process. Instead, 36% use it as a viable way to spur innovation while another 37% use it as an opportunity to achieve their overall growth objectives.”
IT outsourcing takes the operations to new regions. Outsourcing opens up new markets and also helps in getting established in the new locations easily.
Agility and Adaptability
Businesses today have to be more agile and adaptable. With IT outsourcing taking care of major chunk of iterative issues, organizations can adapt better to the changing market requirements. It is not merely about meeting customer demands and scaling. CEOs leverage 3rd party partnerships to drive growth, while alleviating operational risks. Outsourcing partners offer best in class solutions and hence help in maintaining business agility and drive major changes too.
IT outsourcing is used not only to tap on to the talent pool offered by the partner, but also for introducing new processes, skills or technologies into the organization.
With the IT service vendors handling all the heavy lifting it becomes easier for CEOs to build a robust IT function.
There is a lot that IT outsourcing brings in. Even with the known perks, for organizations, it is often the decision making that takes time. In an organizational structure, however, listing just the benefits doesn’t determine the stakeholder buy in. Resurgence of IT outsourcing hence has a lot to do with CEOs being the key decision makers. The power dynamics in outsourcing changes when CEOs are involved, as they often focus more on the negotiation and getting the best deal, which again leverages the service partner’s strength for a competitive advantage.
Working towards financial restructuring, CEOs choose IT outsourcing over the procedural and maintenance costs of in-house staff. For many organizations the pandemic itself has been a tremendous jolt, and for CEOs it has been a new management experience. While finding the right talent poses an issue, so does the unexpected rise in volumes. IT outsourcing not only cuts down the overhead cost but also gives CEOs the ability to leverage outsourcing to reduce personnel costs, principal costs and overall company spending.
They evaluate outsourcing on the same scale as technical investments.
With high-value investment, tracking and getting the best output becomes essential. IT outsourcing streamlines both.
Looking for expert advice?
Be it devising the right strategy or optimizing or migrating your existing operation, Mundrisoft offers expert advice to help CEO’s make an informed decision about when and how to outsource and helps in setting things in motion too.