Thursday, February 7, 2008

To Outsource or Not to Outsource


Many Companies are now considering outsourcing as one of there options for competing in the business world today. Among those are Sears, Roebuck & Co. and financial services company Huntington National Bank. Lets look at how the CIO's of both companies have dealt with the decision to outsource parts of their own company.

1. Here are a few of the reasons Sears, Roebuck & Co. and Huntington National Bank respectively have approached their outsourcing decisions:
  • Outsourcing, no matter what it is, has an effect upon employees. Whether people are losing jobs to outsourcing or getting an opportunity for growth there is good and bad.
  • Money is usually an issue when it comes to outsourcing. Companies can save some much needed revenue by outsourcing and using that money elsewhere.

2. Why did Sears, Roebuck & Co. choose not to insource it IT development?
  • By outsourcing the IT development department in Sears they were able to
  • first, use the remaining staff for developing new retail systems,
  • two, they avoided having to hire a bunch of technical specialists, and
  • three, save money and reach their company goal of having a stable infrastructure.

3. Why did Huntington National Bank choose not to outsource its IT development?
  • Huntington had already been outsourcing their deposit and loan systems.
  • Because the CIO knew about the consequences of outsourcing he also understood that creating outsourcing agreements are loss leaders to start with the revenue coming in later in the year.


4. Here are some of the factors that may have "forced" Sears to outsource:


5. Here are some of the factors that may have "forced" Huntington National Bank to insource: