The Transformational CIO: Leadership and Innovation Strategies for IT Executives in a Rapidly Changing World

Strategic Sourcing and Business Value

For nearly two decades, the idea of outsourcing has been joined at the hip to the idea of cost savings. The narrow focus of the discussion has led to decidedly mixed results. There is no doubt that outsourcing has enabled many companies to achieve truly amazing short-term cost savings. But I would venture a guess that an equal number of companies missed strategic opportunities for long-term growth as they focused their energies relentlessly on cutting costs to the bone.

Rajeev Mehta is chief operating officer, global client services at Cognizant, a worldwide provider of information technology, consulting, and business process outsourcing services. Raj is responsible for all of Cognizant's client-facing activities, and he has a truly unique view of the IT universe. I was happy to catch up with him briefly before the book went to press.

“Obviously, there's been a lot of uncertainty in the past couple of years,” says Raj. He sees CIOs in some industries “taking dramatic steps” that will enable their companies to become more nimble, flexible, and competitive.

“The best CIOs are doing a combination of cost-reduction and innovation,” says Raj. “They are reducing fixed costs and plowing the savings into innovation. They are spending money more wisely.”

Successful CIOs will continue searching for new ways to drive down costs and they will focus on achieving strategic business goals. Outsourcing will remain an important part of the equation, says Raj. ...