Outsourced IT has been a thing since forever. In fact, you could argue with shared punch card machines at the dawn of computing time, that outsourced IT services were the norm before we could afford our own systems and teams to support them. And like many things in the technology world, whether to insource or outsource is still hotly debated and often cyclical.
But maybe it’s time we challenged this model altogether. Why does it have to be one or the other? Just because we can define it in a RACI, contract it easily and fit it into an ITIL service management framework?
The reality is that how we use technology in our businesses is changing. If you want any more evidence of that, you could simply look for new job titles springing up in digital teams that you just don’t understand…. Or if you are a bit more of a traditionalist you could look up Gartner’s bimodal IT model:
Now we don’t all have to be fans of how Gartner presents their Mode 1 vs Mode 2 approaches, but I think we can recognise that we are making a large shift from predictable and well understood, traditional IT to exploratory and iterative, innovation-based digital products. This is why we’ve seen the rise of methodologies like Agile and DevOps to manage delivery and operations.
Simply put, these are all just responses to the fundamental shift we are seeing. IT is shifting from a cost centre that supports business functions to a profit centre and revenue-generating core part of our business services. In other words, we’re moving from the back office to being our “front of shop”. Rather than focusing on just how we store our files and deliver emails, we are shifting to how we build new products and digital channels to market.
For IT providers, there is no longer a generic or commoditised capability that can be leveraged amongst multiple customers. It requires knowledge and engagement with the business. Specifically, it requires intimacy with the business which leads to the generation of associated IP.
Now if I come back to the original premise of this post. The old model of outsourced vs insourced IT is actually rapidly being outstripped by arrangements that see much more flexibility and demand closer relationships by the parties involved. The reality is that the build and support for a digital product can require an immense mix of skillsets that it simply isn’t realistic to hire for. So the better question is how can you create multi-disciplinary teams across your internal organisation but also outside of your business? And I’m not talking about body shopping or hiring contractors - I’m talking about how you can consume capability from outside your organisation and mix that into your projects and operations.
While this definitely presents a few new challenges, it also creates a raft of interesting possibilities about how organisations can collaborate together. This is why it may be the end of the world as we know it, but I really do feel fine.