Outsourcing is a word that instantly conjures up a variety of opinion, emotion and reaction. It means different things to different people and the concept has a chequered past, with most people citing the myriad horror stories rather than any business successes.

When it comes to deciding how to source the IT services for a company, there is no perfect answer. Logic tells me so. If there were, we would all adopt the same solution and the consultants would have to find other ways to earn their fees.
But outsourcing successes exist. No chief information officer (CIO) would willingly follow a route that is guaranteed to fail, yet outsourcing has a place on the CIO agenda.

In too many businesses, IT is seen as a necessary evil that sits alongside finance and human resources (HR) ­ the other pillars of support.

Yet the true value of the IT team does not seem to be regarded in the same
hallowed terms as accountants and HR professionals. IT is often seen as the area that constrains the business, rather than as an enabler and leader.

Looking at outsourcing can provide some reasons for this. It is a useful measure against which to benchmark a company’s skills, structure and costs.
Before you get into the detail of outsourcing, it is vital to understand your own firm’s future strategy and likely needs for IT.

If yours is an acquisitive company, think about how an outsourcing arrangement can be moulded to take on services from acquired businesses. If you are expanding overseas, think about any special agreements you will need.

In many cases, a partial outsource arrangement can bring real benefits. Some companies have in the past chosen to outsource as much IT as possible, rapidly coming to regret the loss of control.

Many of these firms subsequently brought areas of IT back in-house, or are still struggling to redress the balance.

So, if you are going to use the dual-sourced route, what should you consider?
I would advise holding on to the strategy and direction of your IT. Aim to retain the business-facing skills of project management and business analysis.

Also keep control of enterprise architecture and innovation, which can rarely be successfully outsourced without constant input from the customer.
Ensure you have a well-developed career path for your staff which includes interesting projects. Do not give all the juicy work to the suppliers; aim for project teams which combine resources from both companies.

In the case of a prime supplier that is managing multiple sourcing deals, you will need to understand how sub-contractors are managed. Be clear who is accountable for the service, and ensure the prime contractor has the relationship skills to manage other providers.

There is likely to be much concentration on service levels and you will need to understand the value of particular measures. I have found a frequent trap relates to the helpdesk, or first line of customer support.

So many suppliers want to commit to solving problems within a certain time, but as a result focus on workarounds and temporary fixes rather than dealing with the root cause of the problem.

Take care with supplier-specific solutions that offer specific arrangements, such as standard desktop provision. Such deals might cut support costs in the short term, but they could prove expensive if you should wish to change your supplier when the contract is due to be renewed.

Finally, the Holy Grail ­ making your supplier put its best people to work on your account. Ensure the supplier feels it has been given interesting work, and has an opportunity to grow the account ­ and share the risks and the rewards.
Remember, the supplier is in business for profit, as well as the more altruistic goal of quality service provision.

Outsourcing suppliers are not a bunch of failed IT departments; they can offer real benefits if you are prepared to invest time and effort. CB

Denise Plumpton is director of information at The Highways Agency