A Strategic Guide for Local Government On: Outsourcing
ROLE OF THE CIO
The role of the CIO is very important in outsourcing arrange- ments. Half of CIOs come from a technical background; the other half sport non-technical creden- tials. With reference to outsourc- ing, the role of the CIO is seen more as a business function than a technology function. Using the assistance of their technology managers, the CIOs need to be able to manage in a matrixed environment, articulate the gov- ernment’s business challenges and issues and understand the solution strategy that the vendor is proposing. In addition, the CIO needs to be able to manage to business results and sell changes to diverse stakeholders, from citizens and employees to elected officials.
As the organization moves forward with out- sourcing, the next step is to create the planning and implementation teams. This step differs for jurisdictions depending on the number of functions to outsource, they might include: procurement, employee relations, and other business functional areas.
Effective team dynamics play a large role in the success of any large initiative. Not only is man- aging the teams important, but managing the flow of communication between the teams is equally as important. Team members should include:
Champion: An elected official or execu- tive who galvanizes and evangelizes the project. The champion provides leader- ship and advocacy for the project.
Steering Committee: Policy stakehold- er group that helps resolve issues and risks. The steering committee varies for each jurisdiction, but usually includes sponsorship from the functional business executives, such as human resources, finance and IT. The team meets monthly with the project manager (PM) and pro- vides updates and decisions. This group should review high-level progress and critical risks, and help resolve any issues.
CIO: The executive most focused on how technology can meet business needs. The CIO acts more like a contracting manager and relationship builder. In this role, the CIO looks at outsourcing as a business function that adds value to the operations. (See “Role of the CIO” sidebar.)
PM: Assists the CIO in managing the outsourcing contract, change control, SLAs, and the relationship with the outsourcing vendor. The PM coordinates agency resources and work involved with the outsourcer, focusing on project activities, issues, risks, quality, budget, and its team members.
Outsourcer’s PM: Assists the organiza- tion’s PM and CIO in managing the contract relationship and out-of-scope changes, along with its team members.
Generally, organizations should have an RFP team that includes a technologist to determine the requirements, human resources to cover labor relations concerns, and finance and busi- ness leaders for fiscal concerns. Following the development and distribution of the RFP, the RFP team may become the evaluation team to appraise the vendors’ qualifications before selecting the final company.
Union involvement is a critical element to con- sider. It is critical to obtain the support of any employee relations organization or unions. It is advised that employee relations be involved from the beginning. In this way, they can best understand the impact to their members and be allowed to provide input to the RFP and vendor negotiations.