Outsourcing and Core Competencies

It is a sad state of affairs in the world of enterprise architecture when executives want to outsource critical information technology functions. The root cause of this train wreck is the continued failure of enterprise architects to empower businesses to accelerate. This has caused a chain reaction that leads to outsourcing (nuclear implosion) until it results in a total meltdown (destruction of the business). Let's come to the heart of the problem. The proper reaction of an architect to outsourcing should be as follows.

Outsourcing results in taking the core competencies of an organization and moving them elsewhere. This is, of course, inappropriate once you understand the true goal of enterprise architecture. Many people are led down a rat hole with the notion that information technology is just a computerized administration function, which is the most mindless of all strategies. Imagine if Canaxia outsourced production of its cars. What would be left?

If you follow this line of thought further, you will realize that many of the large Fortune 500 organizations' primary business is information technology. For example, insurance companies don't sell manufactured products that are physical; they sell policies, which are contracts. The contracts themselves are promises of a particular behavior for the future that is essentially information. Insurance companies are really in the information management business. They take information and manipulate it to create policies (contracts). What is left of an insurance company if it outsources its core competency?

In many cases, outsourcing is not black and white. Sometimes outsourcing is a viable business decision to reduce costs; however, this can be achieved using alternative methods. For example, Canaxia can move its call center from New York City to Boise, Idaho, where labor costs are much lower. Furthermore, if going outside of the United States proves cost-effective, outsourcing in the same time zone is an option. Countries such as Barbados, Trinidad, Antigua, and so on have English as their native language and are knowledgeable about U.S. culture and lifestyles. We suggest you maintain the ability to check up at a moment's notice on whatever entity provides your outsourcing services. This can only be accomplished by outsourcing to countries with direct flights from major cities such as New York and Miami.

Usually the decision to outsource is done without any input from architects. The only thing I would recommend being passionate about is that a corporation maintain architecture and business control within its corporate headquarters.



Practical Guide to Enterprise Architecture, A
A Practical Guide to Enterprise Architecture
ISBN: 0131412752
EAN: 2147483647
Year: 2005
Pages: 148

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