This question has been asked before, but not often of people like the readers of this forum… the folks who write the code:  Should IT be outsourced?

Reasons to outsource IT:

1.  In some organizations, IT can never reach a size to specialize sufficiently, therefore permanently relegating the IT staff to generalist roles that are usually difficult to fill or may cost more to perform.

2.  Many of the functions of IT provide no strategic value to the business, and therefore the business should seek the lowest cost way to provide those functions.

3.  If you outsource IT, then the technical investments that are needed by any good team are not scrutinized by the business.  Instead, they are hidden in ‘service fees.’  This allows the IT team to spend the money it needs on prevention rather than fighting forest fires.

4.  Most IT shops are terrible at what they do.  Rather than keeping a bad organization running, a company can do better by allowing the competitive market to pick the winners.

Reasons not to outsource IT:

1.  Information buried in the corporation is difficult to secure if it is hosted at an external IT provider’s site.  The company is still liable for breaches in trust, even if the loss occurs because of an error at the outsourced provider. 

2.   If you outsource IT, you get non-strategic software.  Any potential that IT has for providing strategic value is lost, because outsourced providers, by definition, are unable to deliver strategic value at commodity prices.  (This statement may not apply to companies that simply outsource the staffing and management functions, but keep a team dedicated and on-site to deliver business solutions).

3.  Outsourced IT workers are less familiar with your business, and may be less dedicated to the success of your business than regular employees. 

4.  Investing in IT is, for a large part, investing in people.  Any growth of knowledge and skill earned as a result of IT money spent by a corporation is intellectual property accrued to the outsource provider, and not the company itself.  Therefore, if staff changes or, heaven forbid, the company switches outsource providers, then all that investment in human minds is lost.

What do you think?  Should IT be outsourced?

Did I miss an argument that you think should be in there?