Almost every organization outsources some IT. A few outsource everything. Most outsource some IT functions.

How much IT you outsource and which particular IT functions says something about the organization. According to The Hackett Group, a financial research firm, “the percentage of outsourced cost in the total process cost … is an important and closely watched metric. World-class companies out­source a substantially larger portion of their IT processes [44.5% compared to 30.2%] than peer group compa­nies: close to half of all their technology infrastructure-related processes.”

And outsourcing decisions are only going to get more complicated as SaaS, cloud computing, and new technology licensing, pricing, and deployment models evolve. This further raises “the importance of IT sourcing on the strategic IT agenda,” according to Hackett researchers.

Companies turn to IT outsourcing for a number of reasons. Some lack the skills in-house and are not in a location or position to attract those skills. Others outsource IT for speed and flexibility, the ability to deploy new capabilities fast. For some, outsourcing makes sense when demand for IT services fluctuates wildly. But the main reason companies outsource IT is to save money.

The Hackett Group alludes to this when it says: “The global recession has amplified the importance of outsourcing value drivers, resulting in continuing growth in outsourcing activity. This is particularly true for companies desiring to accelerate realization of labor arbitrage through the off­shoring of commodity processes.” That means they can hire sufficiently skilled cheap IT labor offshore.

Of course, this doesn’t always work out as expected. See my earlier wiredFINANCE piece, “Ship IT Offshore,” April 23. Also check out my more recent wiredFINANCE piece, “Five Ways to Avoid IT Outsourcing,” May 22.

Another research group, TheInfoPro, recently looked at cloud computing, which is the latest twist on IT outsourcing. It found “cloud computing for infrastructure (servers, storage, networking, security) is still in its infancy, with the majority (80 percent) of respondents having no plans for adoption.”

However, when TheInfoPro looked at the data for large organizations, it found that 90 percent will build their own internal cloud architecture rather than buy cloud computing services from an external service provider. What the companies were going to do with their internal IT clouds was not clear, but internal IT clouds don’t sound like outsourcing as we know it. Some observers suggest the companies will use internal clouds to provide revenue-enhancing IT-based services to existing customers or to attract new customers.

SaaS, according to TheInfoPro data, appears to be a different story. The researchers found that 85 percent of respondents think they could technically use the SaaS model within their company. However, over three-fourths of respondents would not be comfortable with having more than 20 percent of applications delivered via SaaS.

So, how much of your IT infrastructure should you outsource? If you strive to be world-class, think more rather than less. The jury still appears to be out, however, on whether that outsourcing will be delivered via the cloud. Stay tuned. ###