It's not about who does the work, it's about how the work is done. You need continuous delivery and tight feedback loops with the end-user. Outsourcing typicall

It's not about who does the work, it's about how the work is done. You need continuous delivery and tight feedback loops with the end-user. Outsourcing typically fails because of long iteration cycles and feedback through contract negotiation. An insourced IT department can fail in the same way. The successful outsourcing i've seen did two week sprints with a strong local product owner who spoke directly with stakeholders. The worst outsourcing i've seen was contracting out whole projects that spent six months building "stuff" to do a big bang delivery at the end. That's the model that people doing outsourcing prefer, and it's the model almost guaranteed to fail. I do agree about the risk of outsourcing the core business, but outsourcing makes sense if it's not core, as long as you use the right model. Ironically you have to really know how to build software well to recognize which outsourcing partners are any good. The companies best equiped to outsource are least likely to because they are already in control of their IT processes.