CIO Best Practices: Enabling Strategic Value with Information Technology

Chapter 7. Consider the Outsource:Right from the Start

—BY KARL SCHUBERT

Outsourcing is one of the hottest topics in CIO circles today: a general online search yields tens of millions of hits; an online search through CIO magazine's online Web site alone yields tens of thousands of hits; a similar search on Harvard Business Review Online yields nearly 200 hits. It is also a hot topic in professional circles. A search on the IEEE and ACM portals limited to the past three years yields more than 500 hits. Outsourcing is clearly one of the most significant topics for senior managers in all industries and enterprises of all sizes.

Taking a step back from this overwhelming amount of information, what does outsourcing mean? This chapter investigates the many interpretations of outsourcing, but let's start with the proper definition from Webster's Online Dictionary:^[67]

The practice of subcontracting manufacturing work to outside and especially foreign or nonunion companies.

Although Webster's defines this as a noun, it is in practice more a verb: the entire process of proactively deciding and managing the what and why and how of business-to-business partnerships up front, during the ongoing activity in the middle, and while finishing up or cleaning up (if need be) at the end. Then there's the approach to outsourcing: is it "outsourcing" or "offshoring" or "outhosting" or "insourcing" or some combination of these? Perhaps first and foremost, is any form of outsourcing what you really need? ...