05/05/09

Run, Grow, Transform: the role of outsourcing in IT strategy

Neil Anderson

Reflecting on the various things I heard on my show tour last week, I was particularly taken with the presentation at Channel Expo from Gartner’s Tiffani Bova, VP for research into IT Channel Strategies.

She outlined the Gartner model to distinguish IT spend in end-users into pockets of “Run, Grow and Transform” the run is the cost to operate/maintain the IT system and normally takes up 2/3rd of the IT budget. 

With such a big chunk of the budget taken up with the run it is not surprising in these difficult economic times that Gartner’s research has also identified that the number one business driver for IT at the moment was operational efficiency delivering operational cost savings i.e. cuts to the big run budget. Only through these changes could the budget for the crucial positive IT projects that grow and transform the host business be kept alive, when overall IT budgets were seeing cutbacks. 

For the outsource provision, this represents a tremendous opportunity as our raison d’etre is concerned with delivering these efficiencies savings by focusing on what we are good it, leaving the host company to focus on its core business. 

Of course things are never that simple, and the other message from Gartner was that to unlock these efficiency savings it was important for us to get close to our clients and operate more as business solution providers/consultants rather than sales professionals. We need to truly understand our clients key business drivers and then outline how an outsourcing project could help them achieve the outcomes they desire. 

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