How to compete

Can you compete against outsourcing? Sure you can. Are you competing against outsourcing? Probably not. Why not? Probably because you think the decision to outsource or not to outsource is one that’s outside your control. You figure no one will ask you whether your IT shop’s work should be shipped to India or Canada or Ireland or China or even just to some army of cube slaves on the other side of town.

And you’re right – by the time you’re informed of the decision, it’s too late. By then, the deal is done.

But that doesn’t mean you can’t compete right now.

Maybe it seems impossible. After all, you know what outsourcing has to offer: technical proficiency, economies of scale and – in the case of offshoring – cheaper labour. How the heck do you compete with that? Sure, investments in training will help. But you’ll never get an outsourcer’s economies of scale. And there’s no way you can match that offshore price.

But that’s not how you compete effectively anyway. Think about it: How many software vendors have successfully competed against Microsoft by building word processors and PowerPoint knockoffs?

You don’t compete effectively by trying just to match the other guy’s strengths. You compete by doing what the other guy can’t do.

And what can a corporate IT shop do that hired guns can’t? You can leverage your intimate knowledge of the business and how it works. You can build close relationships with users. You can really understand your company – how it really works, why decisions are really made, what customers really need.

There are advantages to being part of the organization. You’re close enough to spot situations before they become problems and to recognize problems before they go critical. Outsiders have a harder time doing that.

Outsiders – outsourcers – also have trouble being flexible when it’s firefighting time. They can’t react as quickly or throw as much expertise at sudden crises. They’ve got dozens or hundreds of corporate customers whose needs they have to juggle. You’ve got one.

And outsourcers know where their primary responsibility lies: with their profit margins. They’ll always be looking for ways to maximize their own income, not your company’s success. Sure, they’ll want your company to succeed – they won’t get paid otherwise. But their customers’ success will always have to be priority No. 2 at best.

For you, it can be Job 1. In fact, it had better be.

Those are your competitive advantages. Oh, you’ve got one more: You already own your organization’s IT work. Right now – and at least until your CEO starts thinking seriously about sending that work somewhere else – the job is yours to lose.

So you still have the chance to make your IT shop competitive. You still have time to get in close with users, to think two steps ahead to spot what they’ll need, to fine-tune your processes so you’re delivering exactly what the business requires instead of the generic IT services an outsourcer provides.

Most of all, you have the opportunity to make users, managers and executives happy with the quality and effectiveness of what they’re getting from your IT shop. Satisfied customers don’t look for a replacement – and they’ll pay a premium if they’re sure they’re getting their money’s worth. That’s the strongest competitive advantage of all.

And if you’re really that focused on what your users and business need, you will be delivering their money’s worth – in a way you probably never would if you didn’t take the need to compete against outsourcing seriously.

Sure, you can compete against outsourcers. You may even make it so tough for them to compete with your IT shop that they’ll never have a chance.

The real question is, will you?

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Jim Love, Chief Content Officer, IT World Canada

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