Outsourcing: First Ask Why

Computerworld - Most companies initially consider outsourcing in order to reduce costs. While saving money is a valid reason for making that choice, it's usually not the only factor. Many organizations find that their outsourcing decisions are shaped by a variety of motivations, but identifying and prioritizing them early can help you make better decisions later. Here are some possible motives for outsourcing.
To acquire specialized skills. Many projects require technical skills that the company doesn't employ, either because it doesn't need them on a full-time basis or because it has been unable to hire people with the desired skills.
To meet uneven staffing demands. Some companies facing large development projects expect that when those projects are completed, the need for development staff will decrease significantly. They don't want to add new employees, only to lay them off in a year or two. Migration to a new technology base also creates uneven staffing demands, resulting in an increased demand for new skills and a decreased demand for old.
To mitigate risk. Organizations embarking on high-risk projects generally look for outsourcing partners with deep domain expertise. While the buyer should never outsource total responsibility for the project, hiring additional staffers with relevant experience reduces risk.
To change fixed costs to variable. Employees are generally considered a fixed cost. Outsourcing provides the flexibility to increase or decrease staff size easily and quickly as business conditions dictate.
To improve service. Many companies outsource to increase the level or the consistency of their service. For example, it's not uncommon to find that every major location within a large corporation has its own help desk, each with its own service levels. Outsourcing all of the help desks to a single provider will standardize service and guarantee appropriate service levels.
To impose process controls. Outsourcers make money by standardizing processes. Organizations with weak development practices may use the discipline of a Capability Maturity Model Level 5 outsourcer to force their own people to adopt consistent processes. Similarly, some organizations use outsourcing to impose financial discipline across the company.
To focus management time. Outsourcing noncritical items enables management to focus on core competencies and critical projects.
To maintain objectivity. Technical staffers often become loyal to the technology base they support and may not make the best decision if they're lacking an impartial tiebreaker.
For example, a recent merger resulted in equal numbers of Notes and Exchange users. The CIO used an outside technical expert to get the warring parties to make the best architectural decision based on the needs