Insourcing Strategies

Is outsourcing a potential threat to your I.T. staff? In June of 2006, InformationWeek conducted a study of the business drivers for outsourcing Information Technology.

Seems to me that if your department is nervous, this list provides a blueprint for anyone serious about maintaining or positioning I.T. as an internal core competency.

Not surprisingly, the major driver for outsourcing consideration is anticipated cost savings.

Outsourced contracts are generally based upon measurable SLAs (service level agreements). You pay for a certain level of service.

Ask yourself the following questions:

1. Do we currently have published SLAs for our most routine tasks?

2. Do we monitor our performance against these SLAs and publish them within the company?

3. What are the consequences of missing an SLA? Do we simply "write them off as bad experiences" or do we figure out how to better address the situation the next time. How do your processes get refined, improved? Do you communicate proposed improvements to the affected customer?

4. Are our processes cost effective? Do we have the opportunity to centralize tasks (i.e. network management and monitoring, security, backup and recovery strategies, data center management)?

5. Can we consolidate overlapping or duplicate technologies or applications?

6. Do we survey our internal customer satisfaction? If so, how do we respond to concerns and criticisms?

Strategy #1: In short - start acting like an outsourcing company, paying attention to costs and documented service levels. Be able to conduct a fact based discussion about your internal service levels and their associated costs. It might be beneficial to speak to several outsourcing companies to help benchmark how competitive you really are.

Next, figure out what you're really good at and where you aren't. Have an honest discussion with your team about your overall skill levels. Identify any critical tasks for which you simply aren't well suited. For example, network security is something that while many I.T. departments CAN do, it's something many times left for the experts. Do you really want to be looking through hundreds of pages of packet logs and alerts each day? Is this a competency you will need longer term or is it best left to outsiders?

Strategy #2: Divide and Conquer. Give up the stuff you're bad at, unqualified to perform or simply don't want to do and get really great at the tasks that are important to your company.

Strategy #3: Grow your expertise "two deep". If you're serious about delivering top quality service levels, invest in training for both a primary and a backup person for each critical function. Transition your team from generalists to specialists and increase their scope of responsibility. A bright network engineer at site A should also be able to manage the networks at Sites B and C. This will improve system reliability (fewer cooks in the kitchen), #4 on our list and also improve operational expertise (#6 on our list).

Strategy #4: Prioritize. Make one of those 2x2 Consulting matrices. On one axis the categories are URGENT and NOT URGENT. On the other axis is IMPORTANT and NOT IMPORTANT. Focus on the URGENT and IMPORTANT tasks first. Then forget the rest.

Strategy #5: Network with other (non competing) I.T. departments and resources and share ideas. Too often we all get hung up in trying to reinvent the wheel. What a colossal waste of time! See what works. Adapt practices that are better than yours and make them your own.

Clearly these strategies cannot guarantee anyone a job. But they will go a long way toward improving your internal performance and suppressing that knee jerk reaction to outsource I.T. whenever the CFO's laptop locks up.