The key difference is that if the item (IT in this case) is 'in sourced' when it goes wrong, the CEO can reach out and grab the person (IT Director) and grasp them warmly by the throat. They can even be out of their job by the end of the day.
With out sourcing you cannot do that. You can terminate the contract but that will take months of negotiation and cost more money to change it to another bunch.
When an employee knows that they cannot be made to carry the can - their attitude is different. It is what makes pilots different. As we know, CEOs often pass the can to others too. I have never liked outsourcing because it costs a lot of things that do not show up on the balance sheet.