For most organizations, it is not a matter of whether or not IT functions will be outsourced, but which functions and projects make sense for outsourcing. As a general rule of thumb, most CIOs consider outsourcing when there are budget limitations or the function can be done more economically at scale.
Sometimes, outsourcing is a result of the required resources simply not being available locally. Another reason for outsourcing may be that the project or function is not a valuable use of time for key technical resources.
So, when should you outsource and when should you keep a project or function in house? Here's a checklist to help you make your decision.
Is the function strategic? Email, server administration and desktop support are certainly critical to any organization. However, the reality is that these functions generally do not require knowledge of the core business mission or strategy. Everyone recognizes that email services are mission critical to any company. However, the skills required to manage those emails services do not necessarily require a specific understanding of the company mission.
Does the IT team have the skills to complete the project, and will those skills be necessary post implementation? Some projects require a specific set of skills during the implementation phase. Often, these skills are not required once the software or application has been implemented and is in "maintenance" mode. If you only need the implementation skills for a short period of time or a specific project, consider outsourcing.
What is your current workload? Let's face it, with current technologies, IT administrators can manage a high volume of servers and desktops. A good administrator is worth their weight in gold, but unless you have a large number of servers and workstations to manage, it probably isn't a full time job. For most organizations, this function is added to an already over-burdened technical resource. In a lot of cases, it makes sense to shift this workload to an external resource that can manage thousands of servers easily, freeing up valuable IT talent. Additionally, if IT is already working overtime, outsourcing is the only real way to free up time for additional projects.
Does your IT staff enjoy the work? A lot of IT functions are critical to meeting business objectives, but aren't the most interesting. Put a different way - does your IT staff enjoy the work? By staying focused on projects that are core to the business mission, you can keep your team focused and excited. Outsourcing the "noise" often keeps your staff happy and excited about coming to work.
Is it a one-time project? Migrations often fall into this category. Typically, once these projects are complete, they are done. You only need these resources for a limited time, making these projects a good candidate for outsourcing.
Will your team be threatened by outside contractors? We typically only see this scenario when internal IT team members are concerned that their functions will be outsourced. It's important that you clearly define to your team members what their roles and responsibilities will be going forward. Sometimes this means including the team in the outsourcing decision.
Outsourcing continues to be a viable option for organizations that need to do more with less. As a technology executive, it's important that you review your options to determine where outsourcing may make sense for your organization.