Companies confronting the need to “do more with less” should take a long, hard look at their outsourced commitments before they lay off staff. And although bringing tasks in house means more work for already burdened IT departments, it’s also a chance to take control of costs and re-invest in a more purpose-driven approach. This podcast from SearchCIO offers some perspectives you might want to consider.

Most start up companies I worked for did everything in-house, but we also engaged consultants in ways that became longer and more expenseive than intended. A big company might outsource to save money by handing off “routine” tasks like server maintenance and management. Small startups might outsource because they don’t know whether the task is going to be needed for more than a short period of time. Rather than hire a team of software engingeers, manage them for a year, then lay them off, you might engage a consulting company in the early growth stages as you better understand your needs.

But when the revenue stalls…a day of reckoning comes. There are many “what exactly does that person do?” questions. It is terribly frustrating for IT departments that are well-run because, if everyone is doing their jobs well, the IT function is very low profile. Management can’t see all the problems you have prevented, they just see heads.

If you have outsourcing arrangements, you can shift the discussion to how your team can save the company money. In one organization, we were spending thousands of dollars per month for a support company’s “care and feeding” of our servers. I rationalized and defended that choice because I knew that if we did bring the function in house, it would consume all of my time and/or require an investment of time upfront that I did not have. But it became untenable as we realized even adding virtual servers and putting them “under management” added hundreds of dollars per month. All our open source initiatives carried an additional price tag.

In a large distributed organization, it’s the same story. Why can’t we just use Wordpress for those blogs? Because it would cost too much. Although Wordpress is free, if we set it up on a server that is managed by the IT department, they will internally charge us for a server because we would now be sharing the servers they maintain. But why should I share equally when the real amount of work required is so minimal?

If you know what you are doing, insourcing can allow you to take control of costs. I know what the “care and feeding” of a linux server is and I’m ok with the minimal automated backups I can set up. If you don’t know what you’re doing…you should invest in tools that help make the insourcing manageable.

Heroix Longitude or another monitoring solution has to be a part of your insourcing strategy. If you have a person who has the time and is excited to learn and manage nagios or another open-source solution, that’s great. But don’t underestimate the time and effort involved. You are making an investment of time, if not money, and you should be careful about positioning any person in your organization as “he’s got time to do all that.” You might just get your best person laid off.

Propose a solution that lays out the costs as 3 plans:

You have to fill in the details. You might use the same approach to justify an open source toolset, but use our ROI calculator and don’t “cheat” on costs by assuming you can make up for money with time that nobody really has available.

Insourcing can be an opportunity for change…and as the podcast I linked to above notes, change is usually good because it forces a re-evaluation of the cost justifications. When times are good, “care and feeding” sounds like a necessary expense. But when you start to ask detailed questions about how your money is being spent, you may discover opportunties to save money and create value.