Two Ways To Channel The Energy Of IT Staff

The growing scrutiny of IT effectiveness is prompting renewed soul-searching about how to organize IT departments and make the best use of existing staff. The reaction tends to go in one of two opposite directions: Scour the staff to find the skills needed to do more in-house development, or outsource more and focus internally on project management.

Sean Moriarty, executive VP of technology at Ticketmaster, the Los Angeles company that sells tickets for more than 350,000 events every year, is going the in-house route because a tighter IT budget has forced him to eliminate some outsourcing. In-house programmers now create E-mail marketing campaigns that were previously outsourced for thousands of dollars a month. Moriarty is challenging the staff to find opportunities to bring more work back in-house, based on the savings he's getting from projects such as the E-mail campaigns. "I realize I can do quite a bit without having to spend enormous amounts of money," he says.

General Motors Corp. has moved the other way by getting IT staff focused on strategy and outsourcing development. The 1,700-person IT organization is stacked with business strategists, project managers, and people who manage outsourcer relationships. "If you have the right makeup in the IT department--if you have great talent in business and technology--then you create what I call information brokers," CIO Ralph Szygenda says. "These people buy, build, and match up technology."

The key to outsourcing is keeping control of the strategic management and design, Szygenda says, which he does by putting people who report directly to him in charge of that. "The accountability lies with the 30 executives who report to me," he says.

Mostafa Mehrebani, CIO and VP at automotive and aerospace manufacturer TRW Inc., is looking to push even more development work outside this year. He began outsourcing two years ago, signing a $200 million contract to have work done by programmers in India. By year's end, TRW wants to have 70% of development work done by outsiders. Outsourcing means having to pay more attention to the business skills of TRW's IT managers, Mehrebani says, because they have to coordinate with workers in a different culture and a time zone 12 hours away. "It was a totally different business model than we were used to," he says.

A change in IT strategy might uncover hidden skills in the workforce, says Malka Treuhaft, CIO at Centre Solutions Group, a financial-services firm that's owned by Zurich Financial Services Group and has offices in the United States and worldwide. Companies should formally track the skills within the IT department, Treuhaft says. She cites the case of a Lotus Notes administrator at Centre Solutions who, unbeknownst to managers, had been taking IT security courses at New York University on his own time.

Says Treuhaft, "All of a sudden, we discovered we had a crackerjack security person."