Andrew Baxter writes in the Financial Times yesterday about the new term being bandied by CSC and other outsourcers. He explains it as "...using outsourcing to support a company's strategic goals, especially in a period of great change".
I can see the value proposition - but as a sourcing adviser I would decompose the offering in to a) tactical and mature areas on a multi-year basis b) project by project pricing in areas such as application upgrades with on-site and offsite rates and c) premium rate card (but not commitment) for "innovation projects" (see examples in point d of my blog, The end of corporate computing? the beginning of chaos...") if the firm can deliver specific talent for such projects. In most cases, I think the CIO should assign his/her own best and brightest to c) but I can see some staff supplementation needs. If an outsourcer can agree to such an arrangement they can call it dynamic, utility, transformational outsourcing- whatever. I am afraid, though, that they would expect c) rates even for the a) and b) tasks. As a judge once opined ""A Michelangelo should not charge Sistine Chapel rates for painting a farmer's barn.."
On a more cautionary note, Andrew quotes an unnamed "consultant familiar with outsourcing" - "It is not a sound strategy to keep inflating promises, while not delivering on the regular (what I list as a) or b) above) stuff". I know that sounds like me, but I swear it was not. Like Woodstein, I trust Andrew will protect his source!
