Outsourcing: deal or no deal?

News on outsourcing deals has often focused on customers and suppliers falling out. So, perhaps a little surprisingly, the two panellists agreed on a lot of the issues.

Outsourcing – and especially outsourcing that involves the movement of IT operations to offshore destinations such as India – has traditionally been thought of as a way to reduce costs.

However, what came out of the webinar was that, while budgets might be tight in retail IT departments, skills are in even shorter supply.

Zavvi IT director Tony Johnson explained that for a company of his size, recruiting and retaining staff with the right skills is one of his biggest headaches. While Zavvi’s IT strategy is set firmly in-house, it has used outsourcing tactically, for what Johnson describes as commodity IT.

While he believes that a total outsourcing deal would never be right for Zavvi, he admitted that it might be necessary to outsource IT functions that it would never have considered before, because of a lack of skills.

Chris Moyer, chief technology officer at outsourcing and IT services supplier EDS, was also on hand to make the case for outsourcing. He was bullish that a company of his size should almost always be able to find people who are capable of supporting a retailer’s systems – whether they are embarking on an IT refresh project with the latest version of SAP, or squeezing the last drops from a bespoke 20-year-old legacy system.

However, he agreed that EDS must offer skills to retailers in the right place and at the right time, even if they have to be brought onshore for the duration of a project.

Moving a datacentre somewhere else in the world is one thing, but there is a strong case for having technology experts on-site, whether they work directly for the retailer or for an outsourcing partner.

Both the IT director and the outsourcer were in agreement that, irrespective of cost, outsourcing is going to get more attractive in the next couple of years while skills are so hard to come by.