Friday 18 May 2007

The obvious case for outsourcing

If you own a small clinic, a large store, or whatever is not really IT related, you should seriously consider outsourcing the brunt of your software needs until you grow large. You might have "a reference person", but it will be a waste of effort to put money in a whole IT infrastructure. Most companies apply this idea to all their non core competences (i.e., how many maintenance companies are around, who provide janitors, plumbers, etc. in order to save the effort of having full time employees?).
However if your main competence is IT, it is pretty stupid to outsource, well, IT. Where are you adding value? With your mighty knowledge of outsourcing? The basic rule of economics is that the output of your company should be larger than the summed inputs; if you are an IT shop outsourcing IT, then your core competency is not IT: it's marketing. Making buyers and sellers meet each other is a worthy quest, but certainly it is, not IT; as long as you do it right, focusing as a marketing operation it is great, but don't try to show yourself as an IT shop. People will either discover the truth and cut the middleman or see that you provide a terrible service as an IT shop and buy somewhere else.
Going back to the clinic example, I think your company might hire a different company to sweep the floors and clean the bathrooms; however, any clinic will certainly clean it's operating rooms by itself. Being clean is so important in this business that you don't want somebody you can't control doing it for you.
So, the main idea behind this barrage of words is: Don't outsource your main competence. You will suck. And it will show.

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