Project Management

Outsourcing: Balancing the Trade-Offs

Michael R. Wood is a Business Process Improvement & IT Strategist Independent Consultant. He is creator of the business process-improvement methodology called HELIX and founder of The Natural Intelligence Group, a strategy, process improvement and technology consulting company. He is also a CPA, has served as an Adjunct Professor in Pepperdine's Management MBA program, an Associate Professor at California Lutheran University, and on the boards of numerous professional organizations. Mr. Wood is a sought after presenter of HELIX workshops and seminars in both the U.S. and Europe.

If you want to engage in a lively discussion that borders on the religious, go to any IT conference and casually bring up outsourcing, then sit back and watch the opinions fly. Like all complicated issues, outsourcing has valid pros and cons, so there is no universal “right” answer, only trade-offs that must be weighed and balanced in context to an organization’s own circumstances.
All too often, outsourcing is equated to offshore outsourcing, and makes up most of the heated debate. However, outsourcing spans a much broader spectrum and includes any work or service performed by third parties for a company (instead of by its own staff).
So let’s look at outsourcing from both sides of the aisle, and explore the trade-offs. In doing so, a framework will be developed that you might find useful in evaluating the extent to which outsourcing is appropriate for your IT organization. There are all sorts of outsourcing opportunities out there. The most popular ones for IT include: 
  • Business Process Outsourcing (BPO)
  • Call Centers
  • IT Development
  • Staffing
  • Quality Assurance
  • Testing
  • Data Centers
  • even All of IT
To begin, consider some of the reasons to outsource some or all of IT (adapted from “Why …

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