To outsource, or not to outsource: that is the question.

If Hamlet were to be reborn as an IT director, that is surely the topic he would be pondering today.

Perhaps Centrica could advise on the slings and arrows of outsourcing fortune, following its bringing back in-house of a major customer relationship management programme. But Kraft Foods may feel it had a sea of troubles and, by outsourcing, end them, after signing a $1.7bn (£930m) deal with EDS last week.

It is as easy to find predictions of the growth of outsourcing as it is to herald its demise. Both camps have plenty of material. In the past year Computing has reported on major firms such as Prudential and Sainsbury’s returning significant projects to their own control. We have written about just as many doing the opposite, such as Unilever, Schroders and Arcadia.

Certainly, the nature of external service provision is changing. Many companies are moving away from old-style mega-deals to a more selective approach, bringing in IT partners for specific functions and retaining others. This requires careful planning and skills in contract and programme management, but offers more flexibility.

The Millennium bug and the post-2000 boom led to a huge upswing in organisations outsourcing IT, claiming it was a ‘non-core’ activity. The rapid advances in technology since that time have placed IT firmly at the centre of transformational change and business strategy. To suggest now, when those original deals are up for renewal, that anything to do with IT is remotely ‘non-core’ is an extremely dubious approach to take.

But IT services remains the fastest growing area of the industry – just look at the spectacular financial results achieved by Indian providers.

Perhaps, then, it is nearing the time to consign the term outsourcing and its traditional connotations to history. Modern organisations will continue to make sensible use of external expertise to meet their objectives, but the idea of handing a function as vital as IT lock, stock and barrel to a third party is likely to decline.

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