Information Technology Reference
In-Depth Information
A Few Common Internal Strategic Decisions
There are at least two facets to IT strategies. One deals with technologies,
enterprise architectures, applications, and IT management models. Think
of it as “internal” to IT. The other is “external” to IT and often more
difficult it is how the company can use its information assets to deliver
on its business strategies.
Now take a look at a few internal strategic issues with which most IT
managers have to deal:
Insourcing and outsourcing
Architectures and technologies
Build versus buy
Insourcing and Outsourcing
Insourcing is the use of consultants and contractors who work along with
employees to deliver on projects and assignments. The assumption is that
contractors are, in the long run, less expensive and easier to let go than
employees. It is a valid and popular strategy to use consultants. At times
it is driven by the need to get quick access to new technologies or to
support peak loads. Some companies have active policies to have a certain
percentage of their resources as consultants instead of employees. Man-
agers often go around head-count restrictions by hiring contractors. IT
departments have always had a large share of consultants and contractors
working within them, often for longer periods of time, in comparison to
other industries. The fact that some of these consultants continue for years
shows that the peak load argument gets forgotten once the work begins.
Not every decision to hire a consultant is strategic. However, some
companies use consultants strategically. A strategic use of consultants
occurs when there is a need to handle a discontinuity that the company
cannot manage through conventional retraining and slow improvement
models. Web technologies represent one such example, when many
companies used consultants to give them a jump start. As discussed
previously, strategy is about focus.
Certain strategic initiatives (e.g., enterprise implementations) are better
implemented through consultants because they can work in parallel with
existing staff who will not lose focus on maintaining and supporting
existing applications. Doing it otherwise would, most likely, put the
enterprise implementation strategy in jeopardy.
Consulting also can be used strategically when a company wants to
stick to its primary work and considers IT as too much distraction from
its revenue-generation activities. A company may be located in a place
