Outsourcing: Born of incompetence?

There's a good discussion going on over in Paul Murphy's blog about the pros and cons of outsourcing your mission-critical IT functions. Murphy, never one to pull a punch, started things off with this:

Outsourcing is a solution to internal incompetence at either, or both, the business and IT levels...Very few CEOs or CFOs credit any part of their organization's competitive advantage to IT, but that says a lot about them and nothing at all about whether IT should be handled internally or externally.

On the contrary, note bloggers John Carroll and Phil Wainewright, intelligent outsourcing is a sign of competency. Carroll: IT outsourcing is a sign of competence, and deciding where to concentrate limited resources."

Phil Wainewright asks: "What could be more incompetent in the era of the network than to cut yourself off from the network? Surely the one lesson we all ought to have learnt from the open source movement is that you get a better result by pooling resources than you do when you act alone."