Southwest Bank-Outsourcing: Reasons Behind Sourcing Process

1. What drove the sourcing decisions on the part of all three business organizations described in the case studies for this session?
Business
Reasons Behind Sourcing Decision
Southwest Bank - outsourcing
Devote more time and effort into research & development

Allow an expert to specialize in IT needs

Lower the cost of IT

Focus on and excel in core business processes
Reliable Utilities - partnering
Over all need for staff to deploy and maintain mapping systems

Need for partner that could dispatch employees for assignments as needed

Acquire technological knowledge from another company

Expand the business capabilities of the company
State Retirement System - Insourcing
Current lack of alignment between business needs and system capabilities

Cost
What actions on the part of each company mitigated these risks?
Business
Risk Mitigation Steps
Southwest Bank - outsourcing
Not outsourcing a critical competency

RFP:
Only target companies with capabilities and experiences that align w/ needs

Protection of IP:
IT staff is deployed to work with outsource vendor

Southwest staff hired:
Maintain control of information and how it’s used
Reliable Utilities - partnering
On-site partner executive acts as mediator:
Attends staff meetings
Participates in strategic planning
Bring ideas from one company to another

Partner Executive working in house:
Maintain close relationships with user community
Anticipate staffing/expertise requirements

Effective communication to identify issues and solve

RFP:
Well-defined technology agreement
State Retirement System - Insourcing
Compatibility:
Old records converted to run on new