As stated in Part One of the Digital Transformation Series, IT departments have a finite list of options for technical resources with a universe of possibilities limited to only four alternatives. Below, we will discuss and analyze the four possible resource solutions.
1. Employee
Employees are technical resources hired and employed by the business, typically located in the United States. For digital transformation, these resources range in salary from $75,000 to $150,000 per year plus benefits.
2. Onsite Contractor (“Onsite”)
Onsite contractors are contract technical resources located in the United States, generally engaged at the customer’s location, typically paid by an hourly rate, typically reimbursed for travel expenses, and may or may not reside in the geographic location of the business (hence the reimbursement for travel expenses). These resources are historically the most expensive resources IT can engage.
3. Offshore
Offshore are technical resources located outside the United States, typically residing in lesser developed countries when compared to the U.S., always offering a customer value proposition of lower cost. These resources are historically the lowest cost resources IT can engage.
4. U.S. Onshore
Also known as rural sourcing, onshore, onshoring or domestic sourcing, these technical resources are located in non-urban areas, i.e. areas that are not considered major metropolitan, and always located within the United States. These resources are generally priced equal to or lower than an employee when the employee is allocated its fully burdened cost, always priced less than onsite, and always costing more than Offshore.
The above universe of technical resource possibilities are the only alternatives available to an IT department. With this being fact, the opportunity and the IT problem must be solved within these confines.
Stay tuned for part three of the digital transformation series to learn why some of the above technical resource solutions just won’t work.