When people in the IT departments think about “sourcing” strategy, they immediately think about “outsourcing” or “low cost” sourcing. The truth is that “sourcing” is a much more holistic strategy that defines how an organization sources a unit of work. Different pieces of work can be sourced in different ways.
For example, a company may choose to source its help desk to the Philippines but it may choose to do all of its J2EE development on-site. There are a variety of criteria that can be used to make that sourcing choice, but it should be part of an IT department’s holistic sourcing strategy plan. Before we get into the specific criteria and process to develop the sourcing strategy, let’s define some of the key sourcing terms that have been thrown around the industry.
IT Department Fully in-sourced: This is the traditional IT department model. An IT department would hire staff as part of the company and all IT functions would be performed in-house within the company. This was the predominant IT model of the 1970s and 1980s. Not many companies practice this model today.
IT Department Fully in-sourced with external staff augmentation: This is a variation of the above where the IT department is predominantly comprised of internal employees but the staff is augmented with