IS outsourcing in your GIS department's future?
Roy Forsstrom
Analytical Surveys, Inc., 11900 Crownpoint Dr., Suite 100
San Antonio, Texas 78233
Outsourcing
Outsourcing is a business strategy still maturing in the IT industry. The term is barely a
decade old, but its main concepts-sticking to the core business and letting a specialist
agency handle other business functions-has a long history. We are all familiar with
businesses turning over advertising or legal services to an outside firm rather than
maintaining an in-house staff. Taken further, that has created today's model for
corporations, where a business's major functions are contracted to specialist firms so that
it can concentrate on its core business purposes.
Within the IT industry, outsourcing has the dual ability of providing cost savings with
service improvements while unfortunately causing employees to fear that they will lose
their jobs. However, if negotiated and managed well, outsourcing can provide real
benefits to a corporation along with opportunity and stability to employees.
A corporation or government agency considering outsourcing will begin the investigation
with the goal of achieving more predicable costs, more productivity and a better return on
investment. With the new competitive environment in government and utilities,
outsourcing can bring the benefit of being able to move faster and take advantage of new
developments without being hampered by fixed infrastructure. However, a corporation
considering outsourcing will need to keep in mind a few key factors in order to make
choosing a vendor easier and the transition process flow smoothly.
Outsourcing IT Functions
At one time, the size of the business determined likely candidates for outsourcing. Small
firms, generally unable to support an IT group economically, were early users of the
service. Today, large companies such as banks and manufacturers have outsourced their
IT functions. The outsourcing industry now has providers with sufficient resources to
handle both large and small contracts.
In addition to favorable economics, large and small firms look to receive three additional
benefits to outsourcing: capacity, coverage and capabilities. Capacity is the ability to tap
into the outsourcer's capacity at whatever level is needed. The outsourcer is able to
accommodate business cycles at a predictable cost while maintaining the contracted
service levels. Coverage is the ability to meet both the temporal and spatial needs of the
corporation. With 24 by 7 staffing and placing staff in the proper locations, the outsourcer
relieves the corporation of difficult staffing issues. Finally, the outsourcer's capabilities
give a firm the skill sets and resources needed to handle new and evolving technologies.
Over the past 10 years, the number of utilities outsourcing their entire IT department has
continued to grow. Outsourcing companies such as SHL-Systemhouse, EDS, ISSC and
Intellisource are gaining additional contracts as utilities streamline their operation for the
deregulated market, which allow these utilities to concentrate on the core business of
buying and selling energy.
As another function of the IT department, the GIS system has usually been brought along
in the deal with the outsourcing firm. At this point, the outsourcer has the option of
continuing to manage the GIS or subcontract the function to a specialist GIS outsourcer.
Outsource the GIS?
With the trend towards outsourcing portions of the IT function, such as the help desk,
network management or hardware maintenance, and with the appearance of qualified
outsourcers bidding for the GIS function, full or partial outsourcing the GIS will become
more prevalent.
GIS outsourcing can encompass the entire operation or selected functions. For example,
data maintenance is a key element to maintaining the reliability and credibility of data in
the GIS. Backlogs of months are not uncommon in many utilities, while a week or two
delay in updating GIS data can have adverse effects on system operation and customer
service. Seasonal variations in construction and power system maintenance can make it
difficult for a manager to have adequate skilled staff available. To remedy these
significant problems, an outsourcer can provide the capacity to add staff at remote sites as
needed to keep the backlog to the contracted service level, allowing the utility to provide
smooth and efficient operation and service to its clients. Costs are predictable and may be
lower with the outsourcer.
Outsourcing allows the corporate manager to maintain a consistent staffing quality and
level, which is often a difficult task. Top-notch application development and system
administration staff usually have strong computer science backgrounds with specific
skills in the GIS. Obtaining the skills is not easy or inexpensive. Before a staff member is
truly productive, three to five training classes and a couple of years' experience are
needed, and, of course, there is always the risk that other firms offering higher salaries
and increased benefits may notice them. The outsourcer will have the capabilities within
their organization to meet the application development and system administration needs
of the client.
Choosing an outsourcing vendor
Deciding which vendor to depend upon for the next three to five, or more, years is not an
easy task and requires careful consideration. The deal will include an investment in time
and energy, a transfer of business functions, and possibly the transfer of employees along
with hardware and software. Identifying a suitable vendor in this minefield is a daunting
task.
Unless the corporation has experience with outsourcing, the advice and guidance of a
consulting firm will help ensure that the evaluation and selection of the outsourcing
candidate produces the most qualified vendor. In addition, a consultant can help the
corporation determine realistic objectives that are to be met with outsourcing.
The choice of a specialist GIS outsourcing vendor or generalist IT vendor can be based
on the amount of IT services to be outsourced and the management resources available
within the corporation. Complete outsourcing of the IT function to a generalist
outsourcing vendor is viable if the vendor has adequate GIS resources already or a track
record of subcontracting qualified specialist GIS outsourcing vendors. If the generalist
firm is weak in GIS skills, the corporation has the opportunity to contract with a specialist
GIS outsourcing vendor directly.
