CIOs for integrated IT and telecom services

By : |June 30, 2006 0



As CIOs seek to reduce costs and complexity, many of them say they would
prefer to purchase end-to-end service-level agreements from providers offering a
combination of IT and telecommunications services rather than contract for each
separately. They want standardized services that can be developed inexpensively
and delivered wherever their employees conduct business. These findings come
from a recent McKinsey survey of more than 50 European CIOs and industry
experts. The survey sought to assess their priorities for IT and telecom
services.

Most service providers still fall far short of addressing the needs of CIOs.
While 98 per cent of those in our sample agreed that they would like to purchase
integrated IT and communications services that offer "distinctive value," few
providers have sufficient skills in both domains to offer a complete package.
Thus an opportunity exists for companies that can deliver both types of
services-in particular, for telecom providers that can boost their IT skills and
for IT service providers that can expand into networking and telecommunications.

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The trend toward broad service agreements is marked by a shift away from
contracts that specify technology brands and toward agreements that outline
service levels instead ("99.5 per cent availability of SAP payroll applications
per user," for example). The emphasis on services has the effect of reducing
costs, since providers can standardize hardware and software, increase
utilization through shared environments, and pass the resulting savings on to
customers. In addition it allows IT leaders to focus on the needs of the
business rather than on technology. IT staffs sometimes resist a service-level
contract because they are familiar with and trust certain brands and may be
reluctant to cede control. In some situations, CIOs should consider outsourcing
the entire process to a vendor, which would supply its own IT staff.

To Read more, click here:

http://www.mckinseyquarterly.com/article_page.aspx?ar=1783&L2=13&L3=13
Source: www.mckinseyquarterly.com

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