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Outsourcing: No longer a dirty word

• By Michael W. Bucken
• June 4, 2001

A decade ago, IT developers cringed at the mention of outsourcing any part of the application development process, fearing the loss of full-time work. Development managers also avoided outsourcing, apprehensive that ceding control over the building of critical applications would dilute any competitive advantage from proprietary applications. All secrets must be kept in-house was the slogan. If outsourcers were contracted, IT generally relegated them to maintenance projects.

Fast forward to 1999. A tight labor market and rapidly emerging complex technologies are now forcing organizations to spend huge sums to find top-notch developers. The constant developer turnover is causing projects to be delayed or killed.

Consequently, many IT organizations are starting to view outsourcing as a key piece of any development strategy. As a matter of fact, as Rich Seeley and Jack Vaughan point out in this month's Cover Story ["IT to outsourcers: 'Help!'], GartnerGroup's Dataquest unit is projecting that the worldwide IT services market will grow to $630 billion by 2002. Experts outsourcing is no longer a dirty word.

Notwithstanding, just as the early fears of outsourcers were exaggerated, say outsourcers will be hired on to build, implement and even integrate applications.

As the authors note, outsourcers can provide top programmers without having to go through an exhaustive and expensive hiring process. These groups can reduce the ever-expanding backlog of IT development applications. For many companies, so are some of the motivations for turning to outsiders today. If development managers do decide to turn to outsourcing, the process must be done deliberately. Not all service organizations are created equally. Some are better than others, so a careful screening process must be performed. And managers must retain overall control of projects and outsourcers alike. To relinquish too much control to outsiders can be very dangerous or even fatal.

This month also features a look at the ever-expanding application server phenomenon. Max P. Grasso, Bharat Gogia and Hoa Nguyen -- from consulting firm NetNumina Solutions -- step back to look at the state of application servers today ("Application servers unmasked,"). For a variety of reasons, the definition of an application server has evolved quickly over the past couple of years -- almost to the point of meaning all things to all people. The authors clarify this definition, while explaining how the right application server technology can build e-business systems. This is a must read in these confusing times.

Best regards,

Michael Bucken