January 2024. Deloitte Canada signed an agreement with Canada Post as its outsourced IT service provider. Vodafone signed a 10-year deal with Microsoft. Eviden signed a $2.8 billion five-year agreement, also with Microsoft. Welcome to the coming of age of IT outsourcing as companies fill the gaps in talent, tech and growth with service providers that can meet their varied demands. According to Gartner, the growth in IT services spend will see it become the largest segment of IT spend for the first time at 8.7% and $1.5 trillion. &nbsp;



This change in spend and focus is also changing the role of the Chief Information Officer (CIO). Always a strategic and skilled thinker with one foot in the future, the CIO’s value proposition is shifting to become more that of the conductor of a vast IT orchestra of commoditized services, support and talent.



“With technology advancing at speed, the increasing demands on robust cybersecurity, and the cost-cutting demands that come with operating in Africa, outsourcing is definitely gaining traction on the continent,” says Michélle Janse van Rensburg, a digital transformation specialist in South Africa. “It allows for the CIO to gain access to niche skills and services that they can then orchestrate from within.”



CIOs are being given the space to get even closer to the business and address business problems at speed and to deftly navigate the talent challenge that remains just that – a challenge. According to Gartner’s forecast, the cost of salaries is expected to rise by 6% which means CIOs are spending more money on fewer employees at a time when they need more hands on digital decks. Outsourced means access to people when almost 60% of IT pros are looking for jobs other than the ones they currently have under their CIOs.



While this talent shift may yet change in the future – although Gartner predicts this is unlikely to happen – the CIO today has to find a way of modifying their approaches so they can better capture the value within their existing workforce while leveraging the skillsets from an array of service providers.



“The CIO is not just the custodian of IT, but the mind behind how to use these as a catalyst for business growth,” says Vishal Barapatre, Group Chief Technology Officer at In2IT Technologies in South Africa. “It is the CIO who will determine whether the business will manage 10 or more vendors, or if the company will consolidate spend into two. They are ultimately the ones who ensure there is solid engagement and service delivery across all vendors and that timelines are met and costs reduced. Their strength lies in accelerating initiatives across multiple vendors and projects.”



The adjustment to, as CIO puts it ‘Orchestrator in Chief’, is also allowing for the CIO to become more flexible, giving them room to stretch into their own skillsets and capabilities. As outsourced teams take on the admin and support, the CIO has the space to focus on innovation, technology changes, and how the business can benefit from new solutions and approaches.



“There is also the added value of having access to a global IT market,” says Koen Matthijssen, CTO at Fetola in Africa. “Many European companies now look to Africa for their talent, not just because of the rates, but because of their skills and maturity. The same applies in reverse – African companies can capture global talent to boost their own technology innovation and maturity.”



The CIO is then as much a strategic advisor as cultural melting pot manager, a person capable of weaving every personality and nationality into the fabric of the organisation. As Alan Turnley-Jones, CEO of Dimension Data Middle East and Africa, concludes: “CIOs are business partners with clear strategic advisory and a deep understanding of what they need their outsourcing partner to provide.”

Application developers at work.

How The IT Outsourcing Trend Is Changing The Role Of The CIO: An Africa Perspective

Much of the coverage of Salesforce’s decision to bid for Slack&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2020/12/01/its-official-salesforce-buying-slack-for-28-billion-taking-on-microsoft-with-benioffs-biggest-deal-yet/">in a transaction valued at $27.7 billion</a>&nbsp;has focused on the intense rivalry with Microsoft, whose Teams collaboration software offering has been outpacing Slack’s growth during the pandemic. But a significant shift is taking place in IT planning that creates an even more powerful commercial logic for the combination of the two software companies—and it’s a shift that’s likely to fuel more enterprise tech M&amp;A in the year ahead.



CIOs and other tech leaders are now looking towards a future in which many more employees are allowed to work remotely for all or part of every week than before the Covid-19 pandemic began. A recent report from research firm Forrester estimates that while less than a tenth of companies will let all employees choose if they want to work remotely once the pandemic is over, 60% will stick with a hybrid model involving a mix of office-based and remote work. This shift is going to have a significant impact on the tech stacks CIOs are building to support workers.



<h3 class="wp-block-heading" id="h-tired-of-tool-fatigue">Tired of tool fatigue</h3>



One of the top priorities is to reduce what Sathish Muthukrishnan, the chief information, data and digital officer of Ally Financial, a financial services company with a market cap of almost $12 billion, describes as software “tool fatigue”. He’s referring to the stress and frustration employees experience when they are forced to launch many different software applications to get their jobs done and then to toggle frequently between them.



This issue was already a concern before Covid-19, but the shift to mass remote work—and the flood of new software applications to support the move—has driven it much higher up the agenda at a time when the pandemic has generally heightened stress levels amongst employees.



Hence growing demand amongst tech leaders for everything from collaboration tools to data analytics capabilities and project management software to work seamlessly together. “In a pre-pandemic world this level of integration was not as critical as it is now, when the ability to interact is essential for the productivity of a distributed workforce,” said Nicola Morini Bianzino, global chief technology officer of professional services giant EY, in emailed comments to&nbsp;Forbes.



Edward Wagoner still sees a role for best-of-breed applications in workforce tech stacks, as do many other tech leaders. The digital CIO of JLL Technologies, a division of $7 billion real estate company JLL, nevertheless acknowledges there’s a challenge to get these standalone services to work more seamlessly together so employees aren’t frustrated as they shuttle between offices and remote locations. “All the tools are great,” said Wagoner, “but often the experience of going back and forth isn’t good.” Larger platforms with more integrated offerings such as a Salesforce-plus-Slack combo should be able to reduce this kind of friction.



Tool fatigue has big implications for security as well as productivity: The more complex the web of independent applications that IT teams have to knit together, the greater the risk security holes will be missed. CIOs also worry that people working remotely tend not to be as mentally attuned to security issues as they are in offices. More tightly integrated software platforms should in principle be easier to secure.



For Ally’s Muthukrishnan, security is “the first bucket” he thinks about as he’s building his company’s workforce tech stack, which also includes collaboration tools and software such as virtual whiteboards that can be used by workers in and out of the office for innovation projects. Muthukrishnan’s constantly on the lookout for ways to reduce friction between different applications. “The key is how well do they integrate with each other.”



<h3 class="wp-block-heading" id="h-a-front-end-for-the-future-of-work">A front-end for the future of work</h3>



Given CIOs’ shifting tech priorities for supporting hybrid work, the bid for Slack looks like a smart strategic move—even though Salesforce CEO Marc Benioff had previously&nbsp;<a href="https://www.forbes.com/sites/davidjeans/2020/11/30/salesforce-slack-acquisition-marc-benioff/?sh=64473ce211de">tried to cool expectations around any deal activity</a>. After starting life as a provider of cloud-based applications for sales teams, Salesforce has progressively expanded into other areas such as marketing, customer success and, more recently, data analytics with its $15.7 billion purchase of Tableau Software.



Integrating Slack will add communication and collaboration capabilities to its platform, which should make it even more attractive to CIOs concerned about software tool fatigue and other issues. In a blog post commenting on the deal, Aaron Levie, CEO of enterprise cloud company Box, said the combination with Slack will give Salesforce “a new front-end for the future of work” that connects the front office, back office and customers together in a single platform.



Levie’s description will resonate with corporate tech leaders, but the deal also raises the pressure on smaller, independent software companies such as Box, Dropbox and Asana to expand via acquisitions to meet CIOs’ rising expectations for secure, fatigue-free software platforms that can effectively support hybrid office-remote work strategies. Those that don’t step up could find themselves overshadowed by the likes of Salesforce and Microsoft—or perhaps being bought by them.



-By Martin Giles, Forbes Staff

Tag: CIOs

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How The IT Outsourcing Trend Is Changing The Role Of The CIO: An Africa Perspective

Salesforce’s Mega Bid For Slack Comes As CIOs Rethink Tech Needs For The Future Of Work