When to outsource IT and when to keep things in-house


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For most technology executives, the question of outsourcing is not whether projects will be outsourced, but which projects will be outsourced. Budget limitations prevent hiring the staff required for every project, particularly when employees are only needed on a temporary basis.

As some IT executives find, the right resources for a project may not be available for hire in their area. Even if the team is qualified and available, a project might not be the best use of their time. When should a project stay in-house and when should you outsource? Here’s a checklist to help make the right decision.

Is the project strategic to the core mission of the company?

While IT projects come from all directions, they can usually be looked at in one of two ways. Either the project is core to the strategic goals of the company, or it’s more of a tactical solution that solves an immediate need. Tactical projects are easier to outsource, because they are typically short-term in scope, may supply a small immediate need, and tend to have a closely-defined end goal.

Strategic projects feed the core mission of the company. While they can often be broken into small, manageable chunks, strategic projects often have a life that extends well beyond the push to production and may go through multiple iterations.

Does your existing team have the necessary skills to complete the project?

One of the more exciting aspects of IT is that the resources you have today may not be the resources you need for tomorrow’s project. Any time you are looking at in-house vs. outsourcing, it’s important to examine the project goal in the context of the resources on hand.

One key place where I’ve personally encountered a resource limitation was in scaling systems. I had a great team of engineers who were capable of supporting and fine-tuning the existing IT infrastructure, but they weren’t the team I would choose to re-architect the infrastructure from the ground up. Hiring experts at scalability was my solution: They helped to plan and execute the migration, and that in turn helped mitigate the risk of magnifying a problem of scale.

What is the workload of your existing team?

If your current team is already handling as many projects as they can manage, outsourcing is the only viable way to add more projects to a full schedule. This keeps your team focused on the big picture, while allowing more projects to move forward. Conversely, if you have a lull (as if that happens) it can be a great opportunity to examine the projects that were shelved due to lack of resources.

Even if you have the necessary team, is the project the best use of their time?

This could also be characterized by asking if your team will dread coming to work if they have to do the project. Many IT projects are necessary for meeting business objectives, but aren’t the best allocation of your limited resources. By keeping your team focused on projects that keep them excited to come to work, you retain great employees longer and meet the big goals. Outsourcing the “boring” stuff keeps your team from feeling like they are being punished.

Is the project a one-off or part of a bigger mission?

In other words, is it something that needs attention now, but may never be needed again?

Data migrations are something that fall into the one-off category. If you need to migrate data between database structures or get data into a format that matches your existing schema, an outside team can be ideal. Typically, once the data migration is complete, the work is done, so you only need to outsource for a limited time. Your core team may write specifications for the migration and then hand off to external team who can complete the heavy lifting.

How well will your team work with an outside contractor?

The only time I’ve ever found a challenge in integrating outside contractors with the in-house team is when the team is fearful they will be replaced. As a manager, convincing the team that the contractors are being used for a specific project on a limited term, so that the team can focus on other projects, is important to maintaining harmony among the team. Sometimes this means including the team in the process to the point where they understand what the contractors are working on and how it fits into the overall picture.

These are by no means the only scenarios where you may consider outsourcing as an option, but by running down the list of options above, you can arrive fairly quickly at whether you should be looking for an outsourcing team or completing the project in house.

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