Tuesday, April 12, 2005

Outsourcing... Yet again...

As those of you who read my blog know, I have very mixed feelings about outsourcing and specifically with offshoring. I read an interesting article today:

Offshore Outsourcing: Success and Savings Still Elusive

In short, the article relates that despite problems the trend is gaining momentum. That with respect to 'Customer Service' outsourcing, not only is it NOT saving money, it's costing more than when is was being handled internally.

I've contended for some time that when managers seek to 'Outsource', they're often admitting that they believe the company does not know how to manage the process internally. However, once that process is moved outside, the flaws that exist in the management of the process are magnified, and often geometrically.

Let's face it folks, there is no panacea, except possibly hard (and of the right type) work.

In my opinion, the only way an outsourcing, and especially and offshoring, project can work is when there are people, back home, inside the company, who can apply the proper metrics, tighten the requirements and specification documents and manage the project every step of the way against scope creep.

Those are the same requirements for performing effectively internally, they just become many times more important when the work is being done off site by individuals who may have a communications barrier like time (of day), language, industry specific skills or any others (Often more than one).

The one real downside for the company considering outsourcing their development efforts is the exodus of their internal 'talent'. Every developer knows it takes weeks, months and sometimes years to become truly proficient within an organization. Once the outsourcing/offshoring begins, and the existing staff is gone, ramping back up an internal development team can take a very long time.

I'm of the opinion, that working on the internal metrics, quantifying the IS/IT efforts as a profit center instead of simply as a 'cost center' and developing (or hiring) skilled project managers is the way to contain development costs. To simply attempt to shift them to the 'lowest bidder' reminds me of the old adage:

"You can have it Fast, Cheap, Right... Pick two"

2 comments:

Braleigh said...

I choose cheap and right. Or sometimes fast and right, should necessity overshadow monetary interests. But either way, always 'right'.

Bill said...

Which is exactly the point!! When things get shifted there seems to be an expectation that somehow 'Fast and Cheap' will still yield 'right'... I suppose it could, I've just never seen it happen in reality!

Thanks again for reading, and your comments!