Job No. 1 when it comes to outsourcing is never to outsource a core competency.
I was reminded of this essential fact recently when I read a TechRepublic news story about GE’s huge investment to build a state of the art “green” data center on the same site in where the world’s first commercial computer was deployed in 1954.
It was the story’s headline that really grabbed my attention: “GE thumbs its nose at outsourcing, builds world-class data center.”
It’s eye-catching to be sure, but the wrong spin entirely, and the story itself explains why:
“The new data center was conceived and architected by GE’s internal IT department (along with a few strategic partners) at GE Appliances & Lighting in Louisville, Kentucky. The data center itself is located within the massive complex known as “GE Appliance Park.” Interestingly enough, the site has a distinguished history for IT innovation. In 1954, the Louisville GE complex became home to the first UNIVAC computer that was deployed in a private business. Before that UNIVAC at GE in Louisville, all computers had been part of government projects. That first UNIVAC was used to run a single business application: employee payroll.”
This tells me GE views IT as a core competency. As such – the company should NOT outsource. GE has a long history of firsts and lots of expertise when it comes to IT and computing, so keeping its data center in-house is a logical and wise move.
It’s definitely not a snub to outsourcing, rather it confirms what outsourcing and Vested Outsourcing is (or should be) all about.
In a previous blog this week I wrote about how Hewlett-Packard has decided to refocus its business model on cloud and IT solutions as a “core” endeavor while exiting the PC business by spinning off its Personal Systems Group. This is a tough “business happens” lesson and a return to a core competency.
As the saying goes: “Do what you do best and outsource the rest!” There has to be a clear reason and need to outsource.
Kudo’s to GE for keeping work in-house that is a core competency.