Friday, June 24, 2011

Insource or Outsource? An IT Value Curve Perspective

As the cloud continues to mature, enterprises face a myriad of sourcing opportunities for IT services and it is crucial that IT leaders apply a consistent approach when evaluating sourcing opportunities. The concept of the "IT Value Curve" offered in "Technical Skills No Longer Matter" provides one such framework. I cover this perspective in an article just published by EDUCAUSE Quarterly entitled "Outsource the Transactional, Keep the Transformative." In this article, the IT Value Curve is discussed within the context of Pepperdine’s decision to outsource it's IT helpdesk to Sungard Higher Education. However, do not let the title of the article suggest that all transactional IT services should be outsourced. That path can often lead to disaster. How you make the decision to outsource is just as important as what you may choose to outsource.

2 comments:

  1. For the majority of situations I woudl probably agree. But there are unique drivers and scenarios where I would differ. In my series on outsourcing that began with Outsourcing v3.0 – The Era of the Cloud I share some of these cases.

    Most often, outsourcing anything that involves directly supporting your customer is not advisable. For us that includes student help desk services.

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  2. Jerry, thanks for your comments - I appreciate them. What I have been trying to do with this piece is provide a framework for thinking about insourcing versus outsourcing, and the help desk is an example of a decision that flowed from the framework that I suggest in the piece. That may not be the best choice for another institution or another leadership strategy, I agree with you. What is important from my standpoint is that this is not a "core versus context" thing, there is much more to this type of decision and I believe that "economies of scale" is an incredibly important criteria. It actually makes sense to insource many transactional things provided you can create really great economies of scale within your institution. That is what drives costs down and allows more to be invested in transformative services.

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