Craig Murphy describes the decision as to whether to carry out a project internally or externally. He suggests that the core business functions should be carried out internally, and other functions should be outsourced.
I think the decision should be more around how self contained a project is.
If something is self-contained, and does not need that much in the way from other people in the organisation, it can be cheaper to do this externally. The majority of time in these projects will be spent developing technology, and an external organisation might have people that are better qualified in the technologies that are used, and have experience using them on other types of projects.
If something depends on many others in the organisation, carry this out it internally. The majority of time in these projects will be occupied by complex chains of communication, and you don't want to add the difficulties that communicating with an external organisation will cause. If you use an external organisation, think about the chains of communication first.
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