Designing a Succession Plan for IT Outsourcing


Before deciding to outsource their information technology (IT) services, companies often work to achieve their key technology goals – including developing a strong IT strategy and architecture, forming sound IT business relationships and optimizing functions – by nurturing their own talent. They groom their technology leadership through professional development and advancing their IT professionals to increasingly senior positions across the IT landscape to broaden and deepen their IT-domain expertise. Once companies outsource their IT services, however, they face a possible future in which they cannot retain these key technical leadership roles in-house, and they need to modify their resource development approach to avoid an eroding critical IT expertise.

In reality, sourcing changes the focus of the IT department from what to do to what is required so the provider can determine how to get it done. Along with having fewer internal resources, outsourcing clients often face the loss of some of the typical IT communication and education they normally get from hardware and software vendors, as many of those vendors focus on the service provider instead of the client.

To manage these post-outsourcing challenges, technology leaders need a succession plan to maintain some IT expertise and talent. Here are the ISG Top 5 strategies for doing so.

1. Stay connected in the IT industry. Have the service provider sponsor quarterly Vendor Days when technology firms can show the in-house subject matter experts how their products can help the business.

2. Attend key conferences. The technology landscape is changing rapidly; technical conferences provide information about and exposure to available IT solutions and how clients are putting emerging technologies to use.

3. Infuse the team with outside hires. A company that shows a commitment to maintaining technical skills and key relationships will attract strong candidates.

4. Make sure to rotate and challenge the current team. Aligning technical team members to different parts of the IT organization can enhance their skill set while keeping the expertise in house. Providing expanded responsibilities can also keep key technical leaders engaged.

5. Identify the technology folks who may be in the shadows. There are closet IT subject matter experts within the business, often developing skills with IT projects they are working on. Bring these resources out of the shadows and put them front and center to support the rest of the organization.

ISG has helped many clients develop and carry out succession plans for post-outsourcing IT organizations. Contact us to discuss further.

About the author

Terri is a trusted advisor with deep expertise in strategic asset management and IT global sourcing management. Terri brings a significant understanding of information technology strategy, processes and sourcing-related initiatives to ISG clients. Her roles include Managed Services Director for Technology Business Management (TBM Practice), Asset Management and Consumption Management (CM) within the ISG Managed Services practice, leading designs, solutions and implementations for IT financial and asset management solutions. Terri provides expertise in sourcing methodology, contract administration, financial, performance, relationship management, and transition management. Terri has published several articles on Asset Management, Sourcing Practices and IT Optimization.