Why Enterprise IT Needs To Stop Outsourcing & Offshoring And Go It Alone
Lots of companies use large system integrators to outsource and offshore the development, management and support of their IT systems too.
After seeing hundreds of enterprises do this, I have seen very few instances where anybody on the ground had anything positive to say about these arrangements. The results are slow, inflexible, inefficient and the skills the organisation are supplied with are sub-par.
These deals are struck by leadership because they look cheaper on paper. They think they need hundreds or thousands of people and can do this at the right rates by going to a system integrator with offshore resources.
However, if the results and quality of service are poor, the total cost of ownership does not stack up.
And what if we don’t even need those hundreds or thousands of people because the technology is changing? In a world of SaaS, IaaS, PaaS, cloud, modern automation tools and great packaged vendor solutions, what if you could deliver your portfolio with 20% of the heads, but through a highly skilled, co-located model where the people are part of your own team?
You Need to Own Your Own S***
In today's technology- and software-driven world, companies need to in-source and own their innovation capability. If technology is your business, you cannot risk outsourcing it to a sub-par third party under a slow transactional arrangement at the lowest cost. New market entrants will eat you alive over the coming years.
The key in doing this is to do so only where it helps you to differentiate. Building a CRM system or even a data centre is commodity, and other people can do it much better than you. Consume that as a service from a modern supplier who enables automation and APIs, rather than an offshore system integrator clicking buttons for you in response to tickets.
Build your own innovation engine in your areas of differentiation however is game changing. This is typically some subset of your applications. Put resources into the relevant team, fill the team with a-players and allow them to work in an environment which helps them be successful.
The next time the large multi-million, multi-year contract renewals come up, consider going it alone. These arrangements could be a ball and chain otherwise.
