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Strategic IT Outsourcing

© 2010 by Nick B. Nicholaou, all rights reserved
President, Ministry Business Services, Inc.
Reprinted from Christian Computing Magazine

Recessions are uncomfortably challenging in many ways.  However, they also help us improve our organizational health and mission focus.  We find ourselves having to analyze and justify our expense choices, and when doing so the term outsource becomes a major part of our analysis.  While we see it as a cost-cutting opportunity, it is really much more than that.  It improves organizational health tremendously.

Peter Drucker’s View of Outsourcing
In a January 12, 2004 Fortune Magazine interview Peter Drucker, the father of modern management, said, “The inefficiency of knowledge workers is partly the legacy of the 19th-century belief that a modern company tries to do everything for itself.  Now, thank God, we’ve discovered outsourcing, but I would also say we don’t yet really know how to do outsourcing well.  Most look at outsourcing from the point of view of cutting costs, which I think is a delusion.  What outsourcing does is greatly improve the quality of the people who still work for you.”

True Confessions
I must admit that I’ve fallen into that trap myself; believing that to do things well, our organization should do it all in-house.  The benefits seem to be quality control, dedication to our mission by those doing the work, and maybe a little pride in that it also means that our team is growing, which gives the illusion of success.

The truth, however, that Mr. Drucker points out is that this model is inefficient and costly.  There are many roles for which outsourcing will not only lower cost; it will raise the quality of output.  And for some of those roles, managing them distracts me from focusing on our mission.

The “Pieces” of IT
Ministry IT staff tends to fall into four categories.  Depending on the scope and needs of your ministry, some might be easily outsourced.

  • Programming.  Some ministries need programmers to customize the applications they use because there aren’t any that meet their unique needs.  Having worked with churches and ministries in the IT field for more than twenty years, I think more feel they have this need than actually dohave it.  But even those that truly have the need for custom programming probably do not need fulltime programmers on staff.  This is often a great area to outsource.

    I’m often privileged to serve clients in helping them find software solutions.  At the outset of those projects I tell their staff that the best solution will probably only meet 80%-85% of their needs.  Those who successfully convert to new systems adjust their processes to compensate for the remaining 15%-20%.

    The illusion is that the perfect solution is available.  That illusion sets up expectations that result in never finding a good solution and/ or never being satisfied with the one finally chosen.  Some even make the mistake of deciding to write their own software.  What they don’t realize until it’s too late is that doing so will cost immensely more in funds, time, and lost team productivity, and will never be completed.

  • Hardware.  Some ministries choose to support their own computers.  Rather than purchasing extended manufacturer warranties, they staff to do their own repairs.  The cost is more than hardware and time, it also includes personnel— and it is usually inefficient.  This is also a great IT area to outsource.  And it can be done simply by purchasing extended manufacturer warranties in which the manufacturer will come to your office and fix whatever’s wrong on the next business day or by contracting with a local vendor.

    Infrastructure. Many ministries make the mistake of hiring network engineering staff, which is costly, and figure it’ll make sense because that staff can also do user-level technical support.  However, most who are good at network engineering are not the best personality types to do user-level technical support.

    Also, the best network design strategies come from those who have designed, installed, and then had to support a lot of networks.  Since network projects happen infrequently (typically annually), and since the best networks require very little support, this is also often a great area to outsource.

  • Help Desk.Many ministry computer users require a level of technical support that is above that required by their secular counterparts.  Answering their questions and resolving their IT problems quickly in a culturally relevant way is important to ensuring a good user experience.

    Help desk is the one IT area that most ministries should not outsource.

Looking at the Bottom Line
The first three IT areas are expensive to keep in-house.  Programmers and engineers are worth a lot in the marketplace, and so their personnel costs are higher.  Having hardware support in-house actually increases team downtime while increasing personnel costs due to higher staffing requirements.

Help desk staff, however, are not as expensive to hire.  And if they are not programmers or engineers, they can be selected based more on their familiarity with software and ability to communicate and empathize well, helping those team members who need support to feel better supported.

This is an outsourcing strategy that makes good management sense for most ministries.  I think it would gain the approval of Mr. Drucker, but even more so, of our Lord from whom we want to hear, “Well done, good and faithful servant! …Come and share your master’s happiness!” (Matt 25:23, NIV)

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