[MUSIC] As I said previously, IT is a rather labor intensive domain. Let me remind you that labor costs account for 60% of the total IT costs. It's a people domain, actually. This creates specific challenges for the CIO, because you will see that he has several limitations around managing human resources. One, it's hard for him to grow internally. To recruit and retain the right talents, he has to hire a population of highly skilled technicians with very specific short knowledge, whether it's on specific systems, on specific programming language. And those people will never belong to the core business, such as a marketing guy, a design guy, a sales guy, as I said earlier. So it's hard to come with a promise as an employee for those guys and say come, you will have fun. You will develop. And I would like you to stay for 15 years, and you will have a career with me. Because the human resources from the company, very often, they are used to propose careers to the guys of marketing, of sales, or of engineering. And we will come back to that, about the challenges, about managing the human resources for IT. Then the second limitation is that you have to be able to be flexible with your workforce, to manage peak and off-peak situations. And you have to be able to ramp up very quickly and ramp down, very often much more quicker. It means you will have to manage with external resources, to outsource or to go for freelancers. So how do you design the contracts? How do you make sure that you find the right mix between the internal resources and the external resources? And then the third challenge is that you have to be able to obtain the best quality-price ratio for each one of your resources. Do I need to get a guy onshore, expensive? Can I get somebody to do it for me remote in the back office, in a low-cost country? The challenge will be to find the right match between an individual and a task. We're not talking about community resources where you can say an accountant could be able to manage any accounting table. It's not the same if you're a specialist in network, or if you're a specialist in Java. You cannot exchange the guys. Along with your IT road map, we recommend to build a full-fledged workforce plan. And we will get back to how to build and animate this plan in the next videos. In order to be able to build that plan, you need to make three decisions. The first one is, what are the activities I absolutely want to keep In-house? Because it's strategic, because I want to keep the knowledge. Because I'm sure that if I keep internal staff in developing that application, we will be able to develop some strategic advantage for the business. The second one is, what do I want to keep onshore? What can I put offshore? And this is about what do I have to do locally? What can I do remote? And for what I can do remote, can I cope with the offshore constraints? For example, the language difference or the timezone difference. It's not that easy, depending on what country you're talking about. Then the third question is about outsourcing and how far I want to go in outsourcing. Because I want to be able to keep the mastery on my systems. So I want to find the right mix between my internal resources and my external resources. And within my external resources, do I want to go to one single provider who will then master it all? Or do I want to cut the activities among several guys? In all cases, those decisions are about people and people management. The CIO cannot implement such kind of decisions on his own. He needs the support from the company, from his management. And he needs the support from the people who report to him, who will be the ones implementing the strategy on the field. From his management first, he needs to have support from a social perspective, from a sourcing perspective. Can I go outside? Can I send some of our internal staff outside through a specific deal with a service provider? Do I want to keep the people in my geography for some political reasons? This is also very big contracts we're talking about, a lot of money is at stake. So, will I have the right support from sourcing? Then on the other hand, he will need the support from his management. Why? The managements are the ones who are managing the teams. Why is it that as a manager, I would be open to work with an outsourced, offshore team? What are the benefits for me? For that, he has to engage his teams early on, to be able to develop the vision with them. If you want to engage them, they have to find benefits for themselves. Will they benefit from the savings coming out of such a move? Will they be able, for example, to hire internally some key resources, using part of the savings generated from the outsourcing needs, to be able to expand some of their teams internally on some specific matters? Are we ready to invest a lot on making that kind of deal work? For example, boosting the interfaces, the guys at the front end who will be interacting with the outsourcing. Are we going to train our staff to speak English, for example, so that they're more comfortable to interact with the Indians? That's really something you need to put in the equation. Then last thing, all those projects have to come with on-the-ground pre-studies to make sure everybody is comfortable and we are making the right choices. For example, for a French company, it might be much easier to go for an outsourcer in Romania, where the people are comfortable with French, where the timezone difference is not so big, than going to India, where you know you would get cheaper resources. But the coordination cost, the translation costs between French and English will be so high that at the end of the day the business case is not so good.
