Birdie Masters is a chain of golf schools that operates throughout the southwestern United States and California. Using a combination of innovative teaching techniques and a staff of effective teaching pros, Birdie Masters has become quite successful and has expanded rapidly in recent years. An exciting prospect on the horizon now is an opportunity to establish locations in Japan to serve the needs of the golf-crazy Japanese market.

Janet, president of Birdie Masters, authorized a systems development project six months ago to begin development of a new golf school operations system. This networked system will link all school locations together, and enables each school location to collect basic school transaction data and maintain detailed records of lessons, classes, and student progress. The development project has proceeded smoothly through planning and analysis up to this point. The project team held several JAD sessions that included school location managers, teaching pros, and school students. The team has developed a new system concept that has the enthusiastic support of its end users. Not only will the system provide the school location managers and teaching pros convenient data entry and retrieval, but it will also permit current and prospective golf students to view course offerings and schedule classes and lessons via the Internet.

Right now, on a golf course in Tucson, a heated debate is taking place. The current issue under consideration is the appropriate design strategy to use for the remainder of this project. Jack, the director of Information Systems at Birdie Masters, and Arnold, the project manager assigned to this project, have differing views on whether this system should be developed in house or whether the development should be outsourced. Let’s listen in on the discussion.

Janet: Now, let me make sure I understand the situation here. First, the option of purchasing the software is out of the question, since our system needs are unusual and unique to our business. Is that right?

Jack: That’s correct. There’s no disagreement on this issue. Buying the software is not an option.

Janet: So, the other options are to make the software ourselves, or to hire another company to develop it for us.

Arnold: Yes, those are the basic choices we have. However, I see this as a clear situation where we should make the software ourselves. My project team is excited about this project, and we are anxious to move ahead on the design and implementation of our ideas for the new system.

Jack: Now, not so fast, Arnold. Your team has done a fine job during analysis and you’ve come up with some real innovative ideas for this system. The users are thrilled, and that’s great! I’m just not sure it’s in the best interests of our IS shop to undertake the rest of this project ourselves.

Arnold: But Jack, this project gives us the chance to develop some skills we really need to have. We’re going to have a tough time hanging on to our newer IS staff if we don’t give them the chance to do something innovative like this web-based system, and develop some up to date skills like Java. You know that keeping staff is a major headache for us.

Jack: Yes, I sure know that. I’m just not sure a major project like this is a good time for us to be learning new things. We could hire an outsourcer that already has the skills needed for the project on staff, and they wouldn’t have to go through the training our staff would. Besides, we already have a backlog of work to keep the staff busy for months without taking this on ourselves.

Janet: Will using an outsourcing firm be expensive?

Jack: We’ll get bids from several firms in order to find a good contract. Of course, we’ll be paying for the fact that the outsourcing firm has the skills that we need for this project. But, they’ll be able to come in and get it done for us faster than we could ourselves. Considering the fact that we’ve never taken on a project like this ourselves, I think an outsourcing firm will be cheaper in the long run.

Arnold: I still think you’re being shortsighted in this, Jack. We have good, talented people on staff that we want to keep. How can we keep them unless we give them new and exciting technologies and projects to work on? It might take a little longer for us to complete this project than it would an outsourcing firm, but think of the payoff in terms of higher retention and staff morale! You know we’ll have to maintain this system once it’s installed. If we hire an outsourcer, all the skills and knowledge that went into creating the system just walk out the door when the project’s over!

Janet: OK, guys. I think we need to table this discussion for later. Jack, I think you’re up.

a. Can you identify any other issues that are relevant to the decision of outsourcing versus in house development that have not been raised in this discussion?

b. What would you recommend Janet do? Justify your answer.