Almost every IT organisation outsources something it should really keep in-house — and keeps something in-house that could long since have been outsourced. The cause is rarely reluctance; it's the absence of an explicit assessment. Make-or-buy is that assessment, and it's simpler than it sounds.
The two axes that matter
A good make-or-buy assessment looks at two things at once. The first axis is how strategic an IT service is: does it contribute directly to what makes your organisation distinctive, or is it mainly necessary infrastructure that works the same everywhere? The second axis is how strong your own capability is: do you have the people, the knowledge and the scale to run that service well and keep it future-proof?
Plot those two axes against each other and four zones appear. Each zone has a different logical sourcing decision — one that has nothing to do with how things happened to grow historically.
The four zones and what they mean
Strategic and strong in-house: keep it. This is your crown jewel; outsourcing means giving away your distinctiveness and handing over your control.
Strategic but weak in-house: partner or co-source. You need the service at a high level but lack the capability. Find a partner, but keep control and build your own knowledge so you don't become dependent.
Non-strategic and strong in-house: optimise or standardise. You do it well, but it adds no distinctiveness — see whether it can be done more efficiently, standardised or as a managed service.
Non-strategic and weak in-house: outsource, without hesitation. Here doing it yourself adds nothing and only costs scarce attention you need elsewhere.
The trap: outsourcing something strategic to cut costs
The most common mistake is outsourcing a strategic service purely because it looks cheaper in the short term. That often goes well for years — until the vendor is the only one who truly understands your environment, your negotiating position evaporates and every change comes at a premium. Cost saving is a fine motive in the bottom two zones; in the top two, control weighs heavier than the lowest price.
The reverse happens just as often: organisations keep something in-house out of habit that has long since become a commodity, and pay for it with specialists they'd rather deploy on more strategic work.
What you'd do now
Make the assessment explicit. Plot your key IT services on the two axes — an hour with the relevant managers and a whiteboard is enough. Link each outcome to your business goals and record why a choice was made, so the reasoning is traceable later.
Repeat the assessment periodically. Technology and your organisation move; a service that's strategic today can be a commodity in two years. An annual check prevents historical choices from quietly becoming the norm.
This article provides general information and is not legal or financial advice. Want to apply it to your own situation? Get in touch.