CIOs Must Manage What's Left.

Chief financial officers (CFOS) in the U.S. have shifted their target and placed information technology (IT) on the top of their list of functions that should be subjected to competitive pricing. Outsourcing is widely practiced with regard to factory labor and materials supplies. It is labeled as competitive purchasing, best value procurement or commercial off-the-shelf acquisitions. Given the high percentage already devoted to purchasing to gain a competitive cost advantage, outsourcing initiatives should not come as a surprise. Offshore procurement would be a logical choice, since imports already account for 14% of the gross national product. As a rule, diversified multinational corporations show higher outsourcing ratios than smaller firms. Therefore, one can expect an acceleration in the awarding of outsourcing contracts in $100 million increments. The primary purpose of such contracts is to take over the job of migrating the obsolete client/server architectures to network-based data-centric designs. Outsourcing would pass on to vendors the technology risks for fixing computing infrastructures. Sensational headlines notwithstanding, the CFOS fully comprehend that IT does matter. IT median costs equal median corporate profits.