IT Outsourcing

IT outsourcing has been growing steady ground over the past years, especially that IT organizations are always on the lookout for cheaper--but not less efficient-- ways of going about with their work. With IT outsourcing, firms are given the opportunity to tap specialized skill sets without the need to train manpower, who will potentially transfer to other, higher-paying jobs in the long run, expensive training and skills in tow. Outsourcing various parts of IT also helps firms innovate, because they are given the chance to focus more on their core competencies, and less on "keeping the lights on" for IT. For this month's CIO Roundtable, Computerworld Philippines invited five IT executives to see how much of their IT departments have been outsourced, the benefits they have reaped from doing it, and the many pitfalls of outsourcing IT. Most IT departments don't have the luxury of fat budgets or specialized skills at their disposal. For these firms, outsourcing becomes the key to success. "We know our limitations in implementing bigger systems, or in making sure that we have new technologies for our company," relates Lerry Sangalang, IT manager, Max's Franchising, Inc. " Therefore, most of the time, we outsource several applications." The same rings true for Blue Cross Insurance, a medical insurance provider, whose IT outsourcing efforts saved them precious time and money implementing regional projects. "If we were to do it ourselves, we have to gather the different IT teams from different areas and countries, but what happened was it was done by one team, an outsourced partner. We saved on time and resources because of that," Teddy Trinidad Jr., the firm's IT manager, shares. For other firms, outsourcing eases up the headaches in ensuring that operations are running full-time, every time. "The management is very much aware that developing internal resources will be very expensive, if not risky," explains Mike Dela Cruz, regional IT manager, Royal Cargo. "At the moment, we do not see a revenue ROI [for outsourcing], but basically it ensures we have 24/7 operations." While outsourcing can be beneficial, it can have pitfalls, too, especially for global companies with very specific requirements. "We are a global company, so there will be restrictions in some countries regarding where we put our data," says Earl Erick Ferrer, vice president for global IT, International Container Terminal Services, Inc. "We have been looking for the right partner [for our e-mail system] for more than a year now." But for a small-time company like Island Rose, the idea of outsourcing helps them stay focused on their business goals. "I'm happy with the idea of outsourcing. When it's good, it's really good. And when it's bad, it's still better than if I did things myself," quips Dustin Andaya, marketing director, Philippine Cut Flower Corporation, the mother company of Island Rose. This month's roundtable was moderated by Lito Averia, president of Philippine Computer Emergency Response Team (PH-CERT), and former roundtable attendee. Julius Suarez, sales engineer of sponsoring company Sophos, was also present to offer insights during the meeting.


Lerry Sangalang: We are in the restaurant business. Considering that we are not an IT company, we don't maintain a lot of people who manage or maintain our applications. We know our limitations in implementing bigger systems, or in making sure that we have new technologies for our company. Therefore, most of the time, we outsource several applications.

Earl Ferrer: We actually use outsourcing for a lot of functions in the company. Right now, we are outsourcing the major development of one of our systems, since doing it internally would require more people as well as extending the duration of the project. By getting an outsourcing company to develop it for us, we basically trim down the schedule by more than half, plus we get somebody to support it even if we don't have enough people to maintain it. We have also outsourced various areas and expertise in the company which we don't have, such as fine tuning our databases, which we only do once a year. We've also done the same for network, database, and our other systems. Where it makes sense, we tend to outsource. Currently, we are looking for an outsourcing company for our e-mail system, but it's been a challenge for us. We are a global company, so there will be restrictions in some countries regarding where we put our data. We have been looking for the right partner for more than a year now.

Mike Dela Cruz: Currently, we outsource the management of our AS/400 systems. Apart