CIOs for integrated IT and telecom services

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.






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.






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Source: www.mckinseyquarterly.com