I don't think this is really missed by the MBAs, HN's favorite punching bag. These types of opportunity costs are absolutely a part of the make/buy decision process (but maybe undervalued?). I think it has much more to to with the "enthralled by core competency" aspect.
Some executives stay long term, some build portfolios, guide companies through a given stage and jump to the next. They can then say they “saved” this and that by offshoring. What happens 5 years after they leave is of little consequence.
Institutional knowledge informs why a solution works better than a shiny. The contract org will push through what works best for them, more than what’s best for your org long term. Contract orgs like checking off Hundreds of NIST or CIS controls as if that in and of itself means anything substantive.
And how many companies today are managing costly, legacy software solutions that they built in-house years (decades) ago? Every one I have ever seen.
The same logic could be used to justify duct tape software across the enterprise. There is some point where the cost-benefit leans in favor of outsourcing. Institutional knowledge may be under-priced by today's business execs, that is certainly possible. But we also shouldn't build a homegrown solution for every problem.
I'm confused by your use of "enthralled by core competency". I think if an MBA is actively dissembling the structures that brought a successful product together and exerting destructive control over any further research they absolutely deserve some criticism.
