These days, Enterprise CIOs are looking offshore IT service providers as their partner or as their “semi-owned” extended offshore IT unit, participating actively in their IT Management and catering their business needs globally. One of the reasons for this paradigm shift in the mindset of enterprise CIOs is, if an offshore IT vendor can manage 80 – 90% of their IT landscape or If an offshore vendor gets nearly 80% of the their IT budget, then ideally offshore vendor is equally accountable for sharing both IT and Business Risks with the enterprises. So gone are the days when an offshore vendor can walk away with the profits leaving the risks for enterprise CIOs to manage and burn their fingers (in some cases).
Enterprise CIOs are looking at
• Which Partnership Model to choose from?
• What Risks has to be shared?
• What type of Investments the offshore vendors need to make during the initial stages that were being made from the CIO budget till some time back?
To answer the above questions, Enterprise CIO’s are expecting the offshore vendor to make investments in areas like Application Portfolio Consulting, Offshoring Strategy Implementation, Knowledge Transition, setting up Offshore ODC and Harmonization Activities. In fact, Enterprises expect the vendor not only to invest during the initial stages but also to invest untill “steady-state phase” is attained. Enterprise will reap the business value of offshoring before dishing out the dollars from their pockets. In terms of Business perspective, offshore vendors should look at these partnership models as a business investment made for a new business venture rather than looking enterprise as mere “customers”. Hence they should plan their ROI with a multi-year engagement model with enterprise.
In the forthcoming weeks, I will blog more on how to conceptualize, design, implement, manage and sustain this partnership model in longer run.