Based in Denver, CO, Agile Ideation collects the thoughts and experiences of Ed Schaefer. His posts explore agile and devops related topics as he works to maximize team effectiveness and minimize waste through continuous learning, coaching and empowering teams.

IT Sourcing

The primary advantages of IT sourcing relate to not having to maintain IT in house. For a small or start-up company this may mean smaller staff and the ability to have more specialized internal hires. It may also be less costly (initially) and allow the company to focus on their business objectives instead of having to worry about technology, and in some cases may provide more flexibility because they don't need to figure out how to integrate or implement IT, but simply discuss their needs with a contractor and get what they want. Additionally when sourcing IT it means the IT firm is concerned with upgrades, training, newly discovered threats and other IT issues. Finally, there is also an expectation of a level of expertise when utilizing IT sourcing that may be hard to measure or determine if an organization were to do the hiring and attempt to build their own IT department.

Disadvantages relate more to specificity. I believe that IT sourcing would generally be more of a "one size fits all" type of system as opposed to being specialized and uniquely developed and implemented to meet the needs of the business. This means an organization might have to choose based on what will cause the fewest issues instead of what works best. It also means the organization likely will not have the ability to make changes as quickly as they would like or have IT integrate as closely as possible.

Depending on the type of organization and data in question, IT sourcing can also pose additional risks. If the third party IT firm were hacked or experienced some type of data breach the primary organization still has to alert customers and will be impacted, even though it was technically not their fault. If the IT sourcing firm were to experience business problems or other issues, the main organization may suddenly have no IT at all which could substantially impact business, and without any internal knowledge or experience it would take some time to get internal IT up and running. Finding a firm that is extremely reputable and ensuring strong service agreements are in place is one potential way to mitigate some of these risks. It may also be possible to find a firm that handles IT at the top level, but essentially hires out staff and services to work for, be paid by, and essentially function as another part of the main organization - this may provide some additional options in the event the IT sourcing firm runs into issues.

I don't have any experience with IT sourcing that I am aware of. I know there are some functions at my firm that are sourced from foreign countries, specifically document processing. Some information about this place was relayed to me by my father (weird coincidence). While on a business trip (I think this is in India, I could be mistaken) to review operations for his organization, he learned that my firm had a floor in the same building and was able to see it. He said it was literally a room of monitors, keyboards and mouses, but nothing else. No desktop towers, printers, no paper or pens. My understanding is that when a client fills out a paper application and mails it to one of our US based operations center, the documentation is scanned into the system and assigned to a foreign worker. This individual then goes through the document and takes the information and types it directly into our database so that new accounts can be set up and other information changes are processed. I suspect this is less expensive than having a US worker do it, but there certainly are still mistakes. I've seen numbers transposed or entered incorrectly (often this is related to poor handwriting on the form, but sometimes not) and also incorrect names - in some cases I think this can be attributed to different cultural expectations and norms, certain names or even formation of letters may be common and easy to recognize here, but pose challenges for others. At the end of the day, the cost savings and ability to have processing occur at times when things on this side of the globe are shut down for the night seem to more than make up for the occassional error that later must be corrected.

IT and the Customer Experience

IT Business Challenges