Bringing outsourcing back in-house

With the economy heating up a bit, many IT managers are probably wondering how they might adjust to an environment of increased IT spending and necessary investments. Most IT managers became specialists in contraction (myself included), but should a more expansive environment change our approach?

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I’ve written about outsourcing as a way to deal with tight budgets and a rough economy, but recently a fellow CTO asked me what I would do if the economy gets significantly better and budgets open up. Would I consider bringing anything I outsourced back in-house? I ticked off the list in my head -- help desk, file/print services, VPN, messaging, server management, and SFA -- and quickly realized that I wouldn’t bring any of those services back in-house. 

First, it’s important to confront the notion within some IT circles that outsourcing is inherently “bad” for IT employees. It isn’t necessarily bad. The outsourcing phenomenon could mean that IT professionals might just end up working for outsourcers in larger numbers. Of course, this argument doesn’t address some of the troubling trends in offshore outsourcing that are affecting American IT workers, but since the outsourcers I use at InfoWorld all employ U.S. workers, I’ll leave that angle aside for now.

When the downturn began, financial necessity dragged me kicking and screaming into considering outsourcing for certain functions. With those outsourcing transition battle scars behind me, I now realize that those outsourcing arrangements were the right choice regardless of the economic environment. I’ve grown especially fond of outsourcing arrangements with utility pricing models -- the pricing scales predictably with your company's needs.

To be blunt, I don’t know why any small to midsize company would want to run its own PC help desk and all the related back-end services such as backups, VPN, file/print servers, and Active Directory. At InfoWorld, we don’t -- we’ve outsourced those functions to Centerbeam (similar services are available from other companies including Everdream). Large company IT departments have the means to set up sophisticated monitoring, patch management, software management, and asset management systems, but IT staffs in smaller organizations struggle with a piecemeal approach to proactively managing those systems. With more holistic services available within a reasonable per-month, per-desktop pricing model for small to midsize businesses, it’s just not worth the hassle to run all of it yourself. You can’t do it better, and you are unlikely to do it cheaper.

If you’re running an enterprise messaging system such as Microsoft Exchange or Lotus Notes, outsourcing can make a lot of sense, too. Viruses and spam make even basic e-mail management a serious challenge for most operations, and when was the last time anyone thanked you for a smooth-running e-mail system anyway? Outsourcing a commodity function to focus on more strategic IT initiatives is rarely a bad move.

Finally, if you can fully outsource a system yet still have powerful developer hooks available on demand, it’s an IT dream: no operational responsibility with maximum flexibility. That’s what you get with Salesforce.com and Sforce toolkit, which provides an extensive Web services API into its system. I don’t know of another service quite like this, to be honest, but I’m hoping more services move in the “outsourced with rich API” direction. There is no advantage to bringing such a system back in-house -- you can use the API to make the system “yours” if you must. With this kind of innovation, outsourcing is certainly here to stay.