Farm out or farm in?

With the growth of outsourcing and the pressure for IT organizations to do more with less, most businesspeople would agree that IT should outsource commodity functions -- and focus its effort on services and systems that enhance a business’s ability to compete. That’s why you see IT shops outsourcing domains such as sales force automation, messaging, and even desktop support. Yet defining what constitutes a “commodity” function can be tricky. Just as “one man’s trash is another man’s treasure,” one man’s commodity is another man’s competitive advantage.

For example, anyone who reads this column regularly knows that I think desktop support belongs squarely in the commodity category. In my view, particularly in small and midsize organizations, you have a choice of outsourcing or spending more money to get subpar service -- no matter how excellent your small team is. Not everyone has reached that same conclusion, however.

InfoWorld reader Shaun Jennings e-mailed me to challenge my recent suggestion that desktop support should be outsourced: “One of the greatest assets of an organization is its desktop support operation. If the staff is well-versed and knows what it is doing, then its value to the organization increases as downtime decreases. These individuals are also your front line offense/defense for your organization. They track the trends of the problems and can alert problems with hardware/software before even the network staff might see it over the wire.”

Reading that, I realize that Shaun and I actually agree -- our only difference is where the support personnel are located and what company’s name appears on their paychecks. Commoditization has nothing to do with respect; it merely dictates where services are performed and who pays the people providing it. As long as my outsourcing partner keeps hiring people who take pride in their work, the arrangement will continue to be successful. The savings for me does not come from underpaying IT professionals but from the economies of scale my outsourcer can achieve.

In other areas, commoditization is assumed, but the details end up interfering with the assumption. During the past several weeks, I’ve been working with our IT team here at InfoWorld to evaluate moving the InfoWorld.com infrastructure to a new hosting facility. Most businesspeople view Web hosting and co-location as commoditized, and the basic facts support that point of view. Rack space, power, and bandwidth in any combination seem pretty much the same from provider to provider -- but customer service, reliability, and availability aren’t. Even though hosting facilities have improved overall, shopping purely on price, as you would for a “real” commodity such as sugar, can invite disaster -- consider the lessons of the great Technorati colo fire of 2004.

When I realized our current hosting facility has never had any serious operational problems, I decided its quality of service and general responsiveness vaulted it above the “commodity” status. Shopping around for the lowest bidder would be a waste of time -- especially considering the hosting nightmares I’ve experienced in the past and continue to hear about. If I found a new place with a slightly better price, I might suddenly find myself without the service levels I’ve taken for granted. Hosting, a commodity? For me, it’s competitive advantage.