Money talks

As a high school kid with an unusual interest in politics, one of my favorite books (and movies) was All the President’s Men, the Woodward and Bernstein classic on the Watergate scandal. Unless you’ve been holed up in Uzbekistan, by now you’ve heard that the secret source known as Deep Throat turned out to be W. Mark Felt, former assistant FBI director. As the story goes, Felt repeatedly urged Woodward to “follow the money” in their clandestine meetings in parking garages.

That admonishment applies to almost any organization you want to learn the truth about, including the IT department. It’s budget time at InfoWorld, so I’ve been following my own money trail. The numbers tell a story of how IT is changing. And in some cases, those changes are striking.

InfoWorld is a small company, but that hasn’t kept me from continuing to allocate serious cash to outsourcing. I’ve written many times about my decision more than three years ago to outsource our desktop PC and file/print infrastructure to CenterBeam. In fact, the remotely managed services provided by companies such as CenterBeam and Everdream (CenterBeam’s main competitor) make it seem foolhardy to run your own in-house support services.

I’ve run the numbers many times and one of the great mysteries in IT management for me is why every company isn’t a customer of one of these two companies. Their services aren’t perfect, of course, but most IT departments are far less perfect due to limited service hours and lack of expertise in some areas. Small IT departments can’t be good at everything, and they can’t be everywhere at once.

My advice to CTOs and CIOs who spend significant time on mundane desktop-support issues: The sooner you let that function go, the better. The depth, breadth, and quality of service from companies such as CenterBeam and Everdream scream “game over” for the desktop-support professional as soon as more companies wake up to a value proposition that is already there -- right now.

Fortunately, plenty of IT opportunities are available outside desktop support. My budget suggests that two areas in particular still demand in-house expertise: networking and software development. With each passing year, we move more hardware and key functions out of InfoWorld headquarters and into colocation facilities. The reason is simple: Nagging problems such as heating, cooling, and electrical power essentially disappear, and the cost for datacenter space continues to drop. When all of our assets are distributed across various networks, the rare person who has a deep understanding of the networking guts provides ongoing value that I prefer to keep in-house.

When it comes to software development, I’m a contrarian. Conventional wisdom says software development is the most easily outsourced function. But in my opinion, a talented in-house development team is key to real business innovation.

When I step back and look at my budget, my strategy is simple: Outsource operational functions that provide little or no strategic value to the business (such as desktop support) and use the savings in time and money to fund efforts to build better products and sell them more effectively. As a key part of the business, IT needs to focus its most creative and intensive efforts on supporting new business opportunities with high-revenue potential. The remainder must answer the question: Can it be done cheaper and better by someone else?