How TIO (Total Infrastructure Outsourcing) is transforming the role of a CIO

Organizations to cope in volatile economic climate are increasingly investing time, talent and resources on core competencies to maximize business value. IT is no longer viewed as a business core competency area, but the capabilities of IT as a business enabler is well acknowledged. Internal IT infrastructure and operations are becoming a big burden due to increased risks and complexities in deploying new technology and synchronizing the infrastructure to cope with dynamic business demands. Total infrastructure outsourcing (TIO) offers the solution for overcoming internal IT management in order for the CIO to play a more strategic role in business growth and innovation.

The role of IT as a business enabler is highly emphasized in scenarios where business growth relies relentlessly on business innovation and customers. The focus of CIOs is shifting from managing normal IT operations to playing a more strategic role in business growth where innovation is gaining momentum and driven by technology. Technology enables a CIO to focus more on streamlining business operations, improving solutions, enhancing service competitiveness and generating revenues from new business models. CIOs strive to fulfill these expectations in a highly challenging environment and to a large extent they are successful.

Business expansion is one top priority for enterprises. IT infrastructures that drive business operations depend on three aspects namely, managing risks, enabling agility and flexibility and innovation. For IT to contribute fully in business expansion towards growth and innovation, it has to overcome multiple challenges if the IT infrastructure is maintained internally. The major challenges faced by CIOs with internal IT management include,

  • Complexities in controlling an expanding infrastructure and networks at minimal cost
  • Unable to meet demand spikes and service quality due to limitations in infrastructure
  • Provisioning a highly scalable and secure computing infrastructure with high availability, at the same time keeping costs down
  • Providing a flexible IT environment which is agile in changing market demands
  • Managing vendors needed to support high levels of service delivery
  • Difficulties in identifying and retaining skilled IT staff

These challenges can be overcome to a large extent by optimizing the infrastructure and by avoiding wasted capacity which results in excess spending, and avoiding inadequate capacity which is influenced when responding to market demands. Business enterprises look towards total infrastructure outsourcing (TIO) as an effective alternative to optimize capacities, improve business focus while reducing business risk and complexities.

Successful outsourcing depends on a comprehensive understanding of business and IT objectives and the services worked out by different functions and the management. Here the CIO plays an important role in working out cost-benefit analysis, technology selection and evaluating the needs, risks and benefits.

In a total infrastructure outsourced environment the organization’s leadership focuses on service management as defined in the contractual terms and measured by SLAs. Changes are imminent for the CIO after transition to outsourcing. The role of the CIO undergoes dramatic transformation in TIO and the roles and responsibilities will focus on assessing service performance and compliance by outsourcing provider as agreed in the SLA.

The CIO’s roles and responsibilities in infrastructure outsourcing are examined below:

  • Avoiding costs: TIO services from data centers offer extensive resources with access to latest technology to result in world-class capabilities to gain knowledge, processes and tools. CIOs can significantly reduce the need for capital investments in IT and focus resources on business innovation and development.
  • Improve business focus: CIOs should take advantage of the cost structure in TIO and operational efficiencies. The focus should be more on core business development and strategies, technology solutions for business growth and innovation. Costs incurred in availing TIO services are always much lower because there is no capital expenditure involved in IT hardware. Also costs of maintaining the infrastructure is less compared to maintaining an in house infrastructure. In outsourcing, IT operations are managed by skilled experts available with the provider. This further reduces the time spent on IT by CIO and other IT staff.
  • Re-engineering: CIOs can accelerate re-engineering of systems and processes towards maturity and compete in world-class standards. TIO shifts IT expenditure from Capex to Opex. The pay as you go model offered by service providers or data centers promises significant cost savings for organizations.
  • Enhance agility: TIO offers the ideal solution for developing latest technology infrastructure capabilities from ground-up. The CIO can focus on business agility and competitiveness because outsourcing offers flexible, dynamic and adaptable IT systems for the company to readily compete in changing markets and demands.
  • Easily address business challenges: CIOs due to their technical backgrounds have strong understanding in technology and business processes and develop solutions to directly address business challenges. This process is quickened in TIO because the infrastructure is readily available. CIOs can shift their focus to management skills which include planning, organizing, developing, communicating, etc.
  • Reduce complexities and risk: Expertise is readily available with TIO provider which can be used to handle complex IT systems and applications. CIOs should plan to re-assign internal IT staff with tasks that generate maximum business value.
  • Managing innovation: In the current business trend, service providers play a role in development and delivery of services. In this scenario the key to success for CIOs is to synchronize business and technology strategies with diverse groups with clear objectives will motivate the use of technology in new directions. Therefore managing innovation becomes an essential requirement for a CIO.

In addition to the above responsibilities, outsourcing offers variety of benefits for businesses. CIOs can concentrate more on managing resources to easily meet market demands. With outsourcing CIOs can demonstrate the strategic role of IT in business for growth, innovation and competitiveness and at the same time eliminating risks to business and to IT.