Many smaller IT shops are tempted to outsource Web development processes due to limited internal resources. In fact, roughly one third of small and mid-sized enterprises outsourced Web site development last year. Look out for unexpected risks when exploring external solutions.

Pros and Cons
Web-building firms are eager to expound the virtues of outsourcing development of the corporate Web site. Most of these virtues fall under one of three areas:
" Cost
" Speed
" Expertise

Small business IT leaders investigating Web development outsourcing options must consider both positive and negative aspects of the approach to maintain a balanced analysis.

Security Risks
In addition to cost, skill, and speed considerations, IT leaders must account for security risks. While the enterprise would retain ownership of its own intellectual property, a Web development firm would have access to enterprise data relevant to the Web site, potentially including sensitive information.

Any tools or applications developed for the site automatically becomes the property of the developing party (the outsourcer) unless otherwise specified. Enterprises entering into Web development outsourcing relationships must ensure that the contract includes appropriate assignment of ownership or exclusive license.

Key Takeaways
1. Control risks with careful contract development and management. The McLean Report research note, "Key Contract Clauses Mitigate Outsourcing Risk" highlights the critical elements of outsourcing contracts. For a more comprehensive set of best practices, Info-Tech Advisor members can refer to the In-Depth Report, "How to Optimize Outsourcing Relationships." This report contains detailed guidance on negotiating, evaluating, and managing contracts to minimize the potential problems associated with outsourcing.

2. Small enterprises that meet all of the following conditions are more likely to benefit from Web development outsourcing:
o Lack of in-house Web development expertise.
o A flexible internal timeframe for completion of the enterprise site. The timeframe specified in the contract, however, should be clearly defined.
o No specialized technological requirements for the site.
o Enterprises that do not meet these conditions should revisit in-house options.

3. Internal and external development are not mutually exclusive. Individual processes within the Web development project can be outsourced or brought in-house, depending on the availability and expertise of in-house staff. Differentiate between the initial building of the Web site and subsequent support and changes. Even if initial design and development are completely outsourced, site maintenance can often be performed internally unless major changes are required.

Bottom Line
External Web development firms seem to be an attractive option for small enterprises with limited IT resources. Establish a risk mitigation plan before deciding whether or not to take the plunge.