Pros/Cons of outsourcing solutions vs. internal solutions

By wayne62682 ·
I recently accepted a position with a small e-commerce business as "Director of IT Services", taking over a vacant position. The company had a developer whom they let go prior to my arrival; he seems to have been self-taught and very much in the camp of "If I can't do it my own [inefficient] way, it's impossible." He seemd to have no concept of automaing repetitive tasks.

Anyways, a lot of this company's IT needs have been outsourced to third party companies:

- Email (Exchange) is hosted externally. The cost is about 80 bucks a month. The main benefit of this is that they'll automatically upgrade Exchange to the latest version at no cost to us.

- IT and network services are outsourced, I'm not sure of the cost or the frequency.

- As I said, this company is an e-commerce business. The web server is hosted with a company called eSolutions, which has a data center and provides all of the support/backups/etc. This is pricey, a few hundred dollars a month. The benefit, obviously, is that we don't have to deal with anything relating to it. The downside is that we need to go to the physical location to do anything with it such as upgrades.

- Any programming work required is outsourced to a consulting company. Again, I'm not sure of the exact price but it's only done a few times a year. Most of the storefront is based on an existing (open source?) e-commerce package written in Classic ASP.

Having seen this, my mind is looking at ways to improve the existing infrastructure and cut costs at the same time. I get the feeling that my predecessor was strictly a developer (and not a very good one), and knew nothing about networking, which is why so many things are outsourced. I would ideally like to bring everything back in-house, but I'm researching the pros and cons of having it hosted via someone else.

My vision plan is to consolidate all of our disparate solutions into one concentrated solution at our headquarters, rewrite the storefront in ASP.NET and possibly develop an ERP package for management and administration. Not to get too much into the technical aspects, but we're a few versions behind of software and I'm also planning to evaluate the benefits of upgrading, in particular for Office. We currently use Office 2000 and I'm evaluating if its worth upgrading to Office 2007, or even just to 2003. Apart from the Domain Controller which runs Windows 2000 Advanced Server (no clue on earth why it's running AS instead of the standard version), all our desktops are running XP; the web server is running Server 2003, so my only change in this area would be to upgrade the main server to 2003, probably to Small Business Server 2003 - we're actually getting a new server soon (it was the backup for the web server), a Dell PowerEdge that I plan to convert into the domain controller and retire the old one (it's a good 7 or so years old).

In your exprience how do things stack up? Do you feel the benefits of not having to worry about doing backups or firewalls outweigh the fact that you don't have hands-on access to the servers? How about from a developer standpoint? Right now access to the web server (the primary revenue) is done via FTPing files over; but the benefits of this hosting company managing all of our data might be worth it. From what I've been told, they used to host the server themselves, and it was as secure as swiss cheese (i.e. they got hacked a few times) and thus decided to move it. Again, I think this might have been from a lack of understanding/planning on the part of the IT staff at the time.

Obviously I don't plan on doing all of this at once. I've begun writing a "vision plan" that outlines what I'd like to accomplish within, say, the next year or so. I have not brought it up to management yet, as I want to do my research first and see if it's even cost-effective.

Thanks for the help, everyone!

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