For all but a very few large companies, having an in-house IT department is a bit like buying a railroad when all you really want is the transport. Nowadays, it makes more sense to outsource.
On the face of it, letting somebody else process your valuable and confidential business data may not sound terribly attractive to you. What if there’s a leak? The high staff turnover and less formal controls common in most in-company IT departments make the chances of an information leak far higher than that from a professionally managed outsourcer or service provider.
Therefore, as a CEO, should I outsource or build up a dedicated IT team or department? A review of the potential benefits and pitfalls should shed some light on this dilemma.
The argument for in-sourcing
A primary perceived advantage would be direct ‘control’ over your ‘own’ employees. Most organisations feel that this allows policies and procedures to be better managed. Perceived being the key factor.
Potential disadvantages or pitfalls
In a nutshell, the drawbacks of ‘in-sourcing’ IT support results in poor performance in four key areas. These are namely, objectivity, currency of knowledge/ skills, cost escalation, technological agility, and over-staffing. Each of these are explained below.
Objectivity: For instance, your IT staff might dissuade you from investing in more efficient technology if they think it could jeopardize their jobs as it may expose lack of knowledge or skills.
Skills: One of the key differences in in-house IT as opposed to professional IT support is the stipulation and practice of Standards. As IT expertise is the core competency of professional Technology providers, they are more motivated to be up-to-date with the latest technology, methodology and skills.
Agility: As technology is one of the fastest changing commodities, keeping up-to-date requires frequent un-learning and re-learning. This requires investment in training as an on-going activity. Whilst this is often not a priority if with in-house IT due to day-to-day ‘fire-fighting’ activities, for professional organisations, this is a core requirement.
Over-staffing: When you employ own-staff, you have to ensure that there are standby resources to substitute staff during long periods of leave to be granted (which can be from 21 days to 42 days annually), public and mercantile holidays, etc. This not only drives up your headcount in non-core areas, it has been found that Leaders of most large firms sometimes feel intimidated and held to ransom by colossal IT departments which have been their very own creations owing to the specialist nature of IT.
All of the above puts a massive (cost) burden on the overheads of an organisation and therefore the bottom-line.
So, is there a solution?
Yes! Talk to the Professional Service Providers in the given technology stack or area. This way you not only get the very latest but also retain the agility to steer your business better by spending quality time on your core activities. You can also ensure un-interrupted services by specifying your minimum expected service levels (SLAs) and also have the flexibility of changing your service provider thereby keeping such suppliers on their toes. This is a win-win situation for both parties when done right.