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back to article What have we learned about managing outsourcing?

A few years ago, I was talking to a quite senior chap in a well known IT outsourcing firm. “Trouble we have,” he said, “is that we’ve got all the good people.” Seeing the flummoxed expression on my face, he went on to explain. “It meant there was nobody left inside the organization to work with, who had any clue what we were …

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  1. Anonymous Coward
    Flame

    But what have management learnt about outsourcing?

    But what have management learnt about outsourcing?

    Absolutely nothing it would seem, given that US based management in particular still continue to insist on outsourcing as being a means of "saving money".

    Of course those of us who work in the trenches know different - that typically, outsourcing companies do the bare minimum, often to a very shoddy standard, and produce solutions that aren't always well thought out.

    Because outsourcing is nowadays often offshore too, there is the added problem of the communication barrier - that the foreign developer has no background or idea of what they're being asked to work on, but won't think to question what they are asked to do - hence development can take 2 or 3 times longer than a conventional in-house scenario.

    I've worked as both an in-house and outsourced worker; I know only too well that outsourced companies will do the smallest amount of work possible for the largest economic gain - quite how this is anything but bad for a company is of course a fact to be removed via spin generated in the upper echelons of management. By the time anyone notices that outsourcing has in fact cost the company 3 times as much as in house development, the manager that presided over that project is normally long gone citing their successes in their CV as they go on to butcher another company's internal IT department.

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  2. W.Hower

    hear hear

    I've certainly got better at it over the years!

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  3. Gerard Allwein

    language

    Outsourcing will be a good idea when management decides they themselves should be outsourced "to improve the shareholder value" or whatever other buzzphrase of the week is hot among Business School Product.

    Gerry

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  4. Anonymous Coward
    Anonymous Coward

    Turkeys and Xmas

    So project management is best kept in House !!

    And who decides which tasks in the 'project' can be outsourced. The project manager perhaps.

    I fondly remember the look of absolute horror on an accountants face when I suggested, "as accounting was a mecahnical process using Sage and Excel" that would be easy to outsource..

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  5. G
    Coat

    Agreed

    With many of the comments cited here, althought there was a point in which the outsourcing was supported with accounting practices and nuances that supported wholesale transfer. The outsourcer generally has no appetite to deliver all the client 'needs' as their relationship is commercial and not necessarily for the operational business benefit, [sic] partnership. Shell Oil deal is something to be interested in as they have kept their management functions in house and used delivery partners for the high activity/touch programmes of work.

    Increasingly with these functions outsourced 'Change Management' and organisational development work becomes stifled and more cumbersome to deliver and as a result receive the benefits thereof.

    Having worked in several postions as an outsourced worker, in-house resource and consultant party to both single source and multivendor arrangements, I have yet to see a solution which is ideal.

    Mines the technicoloured dreamers one...... Or black leather trenchie; depends on the rate.....

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  6. Chris

    My experience

    On the system I currently work on, there was a requirement to do an important piece of work which couldn't be fitted into the schedule for the next six months. So my boss insisted on outsourcing the work to an "offshore" company based in India. The work was anticipated to take two months, but the prototype of one half of the system was only delivered after four months of delays. When I looked over the code, I found something that was written as though the programmers had never used Java before (all the classic beginner mistakes, and lots of things that suggest VB programmers trying to get to grips with a new language). It sort of worked, but was fragile, slow and featured hardcoded configuration that presumably matched the programmers Windows PCs.

    I wrote a lengthy report, which was sent verbatim to the outsourcing firm. They came back with a lot of apologies and a promise to rewrite from scratch using a Java developer (one of their less tactful employees even acknowledged that the first prototype was written by juniors with no prior Java experience).

    The second attempt arrived last Thursday. It was actually a warmed over version of the first one, which showed clear misunderstandings of object oriented design, a lack of familiarity with the standard Java libraries and still had hardcoded paths to directories on a Windows PC (data was being serialised to disk, only to be immediately read back, parsed and then discarded).

    Fearing that my boss would just cover up the projects failings, accept the unmaintainable code and pay the outsourcing firm - leaving me with unreliable code that I'd be expected to support - I spent two evenings and the weekend writing my own version of the program. Will I get paid overtime or get time off in lieu? Will I fuck. Will my boss learn not to outsource again next time there's a panic over projects that lack resources? Probably not.

    So, I waste my own free time and the outsourcing firm go off to fleece another company.

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  7. Anonymous Coward
    Anonymous Coward

    Why is everyone so suprised ?

    You pay peanuts you get monkeys.

    Simple.

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  8. Anonymous Coward
    Coat

    Avarice

    Having worked for two outsourcers, one of the big, though largely hidden, problems is that the outsourcer is looking to do the absolute minimum work for the largest possible amount of money.

    They even have their own jargon for this - "Justifiable non-delivery" (you can't check it, so we don't do it, but still charge you as if it had been done), "demand-led resourcing" (you pay us a regular fee and we'll hire it in if and when you need it) and similar, all of which are euphemisms for charging for things which are either not done, or don't actually exist.

    The client-side team are often not of the best quality (who wants to waste their life policing a contract, FFS?), and are often compromised by having been heavily involved in the choice of supplier and contract negotiations. Are they really going to blow the whistle on their own poor judgement and negligence/incompetence? Skilful site managers at outsourcers regard these people as client-side apologists, to be ruthlessly manipulated - Over an indifferent claret, of course.

    It's a sad truth that IT is a core activity for many companies. If your company can't run without IT, then is it really a great idea to outsource it to people who are not necessarily motivated by your success? I once saw over 4,000 workstations and all the behind the scenes stuff (all the office staff and back office functions for a large local authority) be put out of action for three days because a faulty network driver update was automatically downloaded to all their domain servers from Microsoft update. OK, that's a stupid way of doing things, but it meant that a number of server engineers and the test rig could be got rid of, and the contract didn't forbid it. SLA didn't apply, so who cared?

    Core activities are not just the shiny ones that revenue can be claimed against. To rework an old saw: The sale's not made until the cheque's been cashed.

    Can YOU cash cheques without IT?

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  9. Henry Wertz Gold badge

    Generic equivalent vs outsourcing

    "Outsourcing will be a good idea when management decides they themselves should be outsourced "to improve the shareholder value" or whatever other buzzphrase of the week is hot among Business School Product."

    It's happened! (This was over a year ago, not recent when so many companies are in trouble) I don't remember what company it was, but over time they'd outsourced packing and shipping, warehousing, manufacturing, IT, and customer support, and had no in-house product design either... Well, the designers and manufacturers realized they could produce for themselves, potential customers realized there was nothing differentiating their products from a cheaper generic equivalent, investors realized the company was nothing but a shell of managers that did nothing productive, so the stock collapsed and the managers were out of work.

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  10. Dave

    Not just IT

    If you outsource your technical resource and your supply chain, the poor sods in the trenches will be the ones firefighting continuously to keep your company afloat whilst the subcontractor just walks away leaving you in the shite.

    This applies to a company I work for. Instead of helping build the business me and my colleagues have spent 3 years of our time sorting this shit out, and still the bosses witter on about what a good idea it is.

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  11. Charles Smith
    Coat

    Shark Baited

    My job was shipped overseas to an offshore outsource company. They promptly discovered that the role was not as easy as it seemed and conned my old company into using three people to perform what I'd previously handled. "You mean that we have to pay for your people to get up at 5 a.m. to catch a plane...?"

    Well after being booted out (with a nice gold parachute thank you!) I've built my own company and live quite nicely.

    I had an email from an offshore company offering all kinds of services at knock down rates, but even their best sales manual could not deal with my put down line. "I was made redundant and my job was offshored to your country! Now what was it you wanted to talk to me about?"

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  12. Anonymous Coward
    Unhappy

    Outsourcing companies = parasites

    At the risk of mixing my metaphors, if you want a parasitical leech milking the cash cow until it kills the golden goose, go right ahead.

    In my 15 years of experience with outsourcing companies, they are NOT team players, they do NOT consider the interests of their customer (ie employer) a priority, they do not take the initiative, and everything they do, costs YOU money.

    (note to self: sounds like the ideal job description for state sponsored employment).

    Avoid like the plague.

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  13. Anonymous Coward
    Anonymous Coward

    I am glad

    that the outsource, offshore distinction has been made.

    Outsourcing is best done with small IT companies or individual consultants, never outsource to a huge company, that is just daft, you lose all control.

    You are better off having about a 50 - 50 mix, moving to about 70 - 30 (perms - consultants). The consultants you use you want to maintain good relationship with, that means paying the invoices :) there is not much else, apart from making sure they have the necessary equipment and software to do the project.

    Perms, you have to think a few will move to consulting and let that happen, again you keep good relationships, which means not playing at being the dumped girlfriend on exit.

    It is so incredibly simple to do, and it is just common sense, but I have seen so many businesses get this wrong, and by next year they went to the wall.

    Oh, and you should also expect to move some consultants to perm when there is a fit, but expect them to leave inside of two years, again don't pout and threaten to hold your breath when that happens :)

    Perms want to learn, so make sure there is a way for them to do that, and don't accept people who don't enjoy IT that is the key, if they don't love IT they need to be given so careers advice and move into a field they do enjoy. There are too many perms in IT who don't want to be there, but just see it as a pay check, they are a drain. And perms also like the tech toys, so make sure to keep the new devices cupboard well stocked for them, they will often find good ways for the technology to be used for business advantage.

    Now big outsourcing companies, you only use those when you are looking to sell the company, and boy does it telegraph that you are looking to sell, but it still makes sense to make the company look better on paper and allow another company to buy it, without having to worry about too many redundancies. That is the only time you should use a big outsource outfit.

    Government needs to buck up, they need to create IT posts in the civil service, and pay at a slightly hire grade then they would normally, so classify as senior accountants. They need to avoid the big service they just don't deliver stuff that works well, instead they have wide boy project managers who will run rings around you on the contract, and hey as the money is not yours most of the government employees just accept it at face value. Government should also be using technology to enhance how they work, and to cut costs, stop with all this data retention on people, no one likes it or wants it. What they should have is knowledge bases that enable the government to work better for the people.

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