Keith Roscarel told ZDNet Australia that while the media heavyweight has reviewed offshoring "multiple times" over the past few years, it is happy with its existing insourced model.
"I'm a personal believer that insourcing does bloom cost reductions in the gardens of capability and good management," he said at the South East Asian Regional Computer Confederation conference in Sydney last week.
Roscarel's portfolio, encompassing offices in Sydney, Melbourne, Brisbane, Los Angeles and London, includes 1,600 PCs and 130 servers, and is managed by 40 IT staff. He admits having travelled to India a few years ago as part of his assessment of offshoring options but decided to settle on an insourcing strategy.
"I maintain the view that insourcing remains a very competitive option that can lead to substantial savings when managed appropriately," said Roscarel, who estimates that, compared with the present model, an onshore 'tier 1' vendor would cost 250 percent more, with offshore services an additional 70 percent.
Roscarel said of the entire development cycle involving offshore services, this generally broke down to 30 percent project management (on and offshore), 30 percent build (offshore) and 40 percent quality assurance and implementation (on shore).
"The offshore opportunity generally falls to approximately a third of the overall project cost," he said.
"I'm a believer in the few good people approach... Highly skilled shops reduce service costs. With a highly skilled shop, there is reduced demand to seek external advice or consultancy and therefore lower service costs," he said.
However Roscarel noted that the loss of key staff was a risk of insourcing that had to be managed: "In some cases the risk of 'key person loss' may be unacceptable."
Roscarel said he previously used a local services vendor to help with projects but swiftly transferred the necessary skills in-house.
"We used an on-shore provider [local vendor Technology One] to deliver on a fixed cost, fix time basis, and then proceeded to transfer capability to our development and support teams," he said.
Roscarel said he created a project management office, and staffed this with full time and direct contractors. Technology One's services were later discontinued. It was these specialist human resources that delivered value and cost reductions for the IT department, he said.
"If you're developing in-house, you've got to own the program," he said.
One major upcoming project at the network will be to consolidate its 130 servers to around 15, through a virtualisation initiative.
Although still in the planning stages, Roscarel said improved disaster recovery and cost reductions were the reasons behind the project: "We can establish a dynamic recovery environment, that's the catalyst for us to venture down this road."
The network currently runs many servers that don't require much processing power, according to Roscarel. Through virtualisation, IT staff will manage these servers as files, rather than a stack of disks. This will make servers easier to move between sites, he said.
The virtualisation technology for the project had not yet been decided, according to Roscarel, however, he expects to achieve a return on investment in two years.
I worked in the Seven Network for many years until about 2 years ago. They did a mass cull of employees to outsource, now it's being reversed.