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    Outsourcing parts of a project

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    What criteria should be used to evaluate outsourcing some parts of a project?

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    Business Value Metrics/Criteria of outsourcing some parts of a project
    The satisfaction of end users and increased operating efficiencies are generally desired IT outcomes.

    Specific areas/criteria to look at include:
    - Customer satisfaction
    - Agency end user satisfaction
    - Increased collection of user fees
    - Quality of service
    - Reduced work-in-progress
    - Staff reductions
    - Responsiveness
    - Expectations management
    - Reduced operational expenses

    Below are more detailed IT Functional areas - specific types of projects, technologies, or services that are generally considered to have some justifications for doing an internal versus external service provision analysis.

    1. Web Site Development and Maintenance
    * Reasons to Outsource
    - Economies of scale for provision of connectivity and hardware
    - Access to expertise
    - Concern over ensuring sufficient bandwidth to accommodate access to the site
    - Reliability of the connection
    - Lack of in-house expertise on Web site design and development
    - Equipment and staff necessary to develop a complex site (e.g., involving database connectivity, on-the-fly updates, and multiple information formats) can be expensive
    - Industry sites with high levels of usage, or which expect occasional significant spikes in visitors, will often benefit from outsourcing

    * Reasons to Insource
    - In-house resources may be able to easily handle the Web requirements
    - Visitor traffic is expected to be manageable and constant
    - Web sites are important and strategic points of contact with the public for agencies and universities
    - The need to respond quickly to desired changes and meet user needs is too important for the agency to rely upon a vendor with many clients

    * Metrics/Criteria
    Web site management is still relatively new, meaning that metrics are still underdeveloped. Quality of service metrics relating to how often the information is refreshed, server downtime, and response to visitor requests can be applied. Other metrics to consider are the number of hits received from unique addresses, how well the site targets its main customers (the general public, corporations, educational institutions, etc.) and responses from customer surveys that document the effectiveness of the site in raising awareness and assisting the customer.

    2. WANs
    Wide area networks (WANs) are often primary candidates for outsourcing cost comparisons because economies of scale and vendor efficiencies are significant. Resource services provisions can be a harder decision. Outside vendors may be better able to offer repair, maintenance, and added resources to handle peak request loads. If, however, the communications provide "front-line" services, such as representing the agency to clients, the communication is so critical to the organization that the loss of control is too high of a risk to take.

    * Reasons to Outsource
    - Cost savings through vendor economies of scale for buying and managing equipment
    - Eliminates infrastructure costs and infrastructure management costs
    - Greater levels of scalability
    - Stable bandwidth transmissions

    * Reasons to Insource
    - May need the capacity available through having their own network
    - May achieve economies of scale if there are geographically distant locations.

    * Metrics/Criteria
    Equipment costs and service charges can be compared to other vendors to ensure a fair price is set. The satisfaction of end users with staff and equipment performance levels (down time, services offered, time to repair, actual bandwidth provided, etc.) should also be measured.

    Sample WAN metrics/criteria include:
    - Voice service availability
    - Data service availability
    - WAN responsiveness (percent of responses within 'n' seconds)
    - Installations of new devices and services
    - Restoration of telephone service failure
    - Completion of maintenance and repair requests (within 'n' hours)
    - Telephone moves/adds/changes
    - Network dial-up access time
    - LAN connection time ...