Outsourcing's Ups And Downs
Companies that choose outsourcing must be careful that they're not sapping their IT departments of precious knowledge and experience, said Ben Williams, senior VP of information services and CIO at St. Joseph Health System, which runs 16 hospitals. Williams said St. Joseph outsourced most of its IT department to Perot Systems Corp. to develop common processes, cuts costs, and gain access to new expertise. Rick Omartian, second VP and IT CFO and chief of staff for Guardian Life Insurance, said Guardian has outsourced 40% of its application-development work to Indian firms, and 70% of that work is done offshore. Omartian said salaries for offshore workers are one-quarter of what the company pays in the United States. Still, the offshore firms' use of Carnegie Mellon University's Capability Maturity Model, a recognized standard for high-quality software development, has led to improved processes within Guardian's own IT department.
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