The Digital Battle — Should IT Be Outsourced or Insourced?
IT can be more expensive when kept in house, but outsourcing IT can mean giving up your competitive edge. Which one is more cost effective, which one is more productive, and which one has the potential to be the telltale sign of a faltering company? Should IT be outsourced or insourced? The questions aren’t easily answered, but that never stopped Craig Brown and Mark Pendergast from tackling the big issues. Together with Thom Singer they dive into another round of The Digital Battle on The Digital Enterprise Society podcast, this time examining every angle of the pros and cons of outsourcing and insourcing IT in today’s competitive environment. On today’s podcast, you will learn: IT should be outsourced IT has always struggled to keep itself relevant. Strong partners can help IT achieve their mission by bringing in the critical skills that are hard to maintain in-house. IT should be insourced IT is a key attribute of any business. In-house IT allows companies to achieve more without losing their competitive advantage. Industry leaders generally insource their IT. Drawing the line between both Identifying what is strategic to your business is key to knowing when to outsource. Anyone who tells you that they know your business better than you do is wrong — you have to own your strategy and know what will make a real difference in your profitability. If you can’t afford to keep the best minds on your payroll, be ready to outsource. When the decision is driven by corporate benefit, it’s usually insourced. If you can’t afford a bidding process to get the best price, then outsourcing won’t be profitable. The impact of the business model The culture and business model of any company has a great impact on this decision. Companies need to clearly identify what they are trying to accomplish with IT. If there is no interest in maintaining IT in-house, then outsourcing is the obvious choice. Large companies tend to follow each other in trends, including outsourcing IT. Finding the right outsourcing partner Finding a partner that is innovative is more valuable than their larger size or agility. Insourcing is not always more expensive than outsourcing. Offshore versus onshore companies are also a consideration. Conflicting interests are a much bigger consideration when outsourcing. Is outsourcing the tell-tale sign of a faltering business? Outsourcing can be the source of finger pointing when things go wrong. How often should a company assess their options? Looking at options every 3-5 years keeps your company in the know. Outsourcers need to know that they are replaceable. Changing vendors can be extremely difficult. If agility is your goal, you need to seriously consider outsourcing IT. Whether you insource or outsource, you need to have a plan in place. Continue the conversation with us within the Digital Enterprise Society Community at www.DigitalEnterpriseSociety.org. Digital Download: Virtual Round-Table Series