Tuesday, January 17, 2006

Outsourcing is OUT

Yep, not exactly the fun, technical topic you'd all dream about.

But this is what Gartner suddenly said in Cannes towards the end of last year, and it has met with massive silence from - surprise - the OUTsourcers:

http://itmanagement.earthweb.com/career/article.php/3559661

The funny thing is that Gartner have been saying 'Outsource, outsource, outsource' for the last many years.

One of the important points in Weinberger's books about being a consultant (thanks to Jakob Hammer-Jakobsen for introducing me to him) is to ALWAYS suggest the opposite of what the client is doing.

Don't be surprised if some of you will have lots of things to do in the coming years due to insourcing, knowledge transfer to newly hired people, and all that.

A couple of observations regarding outsourcing:

1. If you give your iron to somebody else, you don't have the control anymore. Whether you like to be able to control your own iron or not is a matter of taste.

2. If you let another party take care of Change Management, you will soon discover that it's the Mother of all Horrors. It's way more Management than Change. You will find yourself unable to act upon business-critical issues, and you will discover that it's possible to waste unlimited resources (time, money, people) on CM.

3. You will be one of many. Chances are, you'll be small compared to all the others. Guess what that means in term of being unique. Guess what that means in terms of being focused on.

Mogens

23 Comments:

Anonymous Publipower said...

Make Money.-

4:03 PM  
Blogger Kim Nørby Andersen said...

Haha, well, outsourcing are not always a bliss, but definitely not always a problem either. Being employed by an outsourcer, I know of several situations caught earlier than the customer would have been able to, and handled by a skilled worker, more knowledgable than likely to have worked within the customers organisation.

But that is the same as getting indians to code - if you plan carefully, you can benifit, else you lose.

1:55 AM  
Anonymous steen bartholdy said...

is it all about satisfaction ?
If you are satisfied ( price/perfromance ) with your insource staff then outsourcing isnt first thing to do. Otherwise outsourcing seems like an alternative.

7:15 AM  
Anonymous Anonymous said...

Sometimes setting up an environment for outsourcing to be successful makes project cost more anyway. Heck, it needs to adhere to your coding standards, your source code control standars, your documentation standards and run on your hardware with approved 3rd party code. Unless you want to outsource the support of the stuff forever...

7:10 PM  
Blogger Noons said...

Gartner is guilty of promoting sooo many moronic concepts to the business community!

About time people stopped listening to irresponsible and inexperienced "analysts" such as these.


Reminds me of the CEO of a local bank who claimed he was doing a tremendous job in implementing an outsource and branch closing strategy as a way of saving money.


Yes, it works. But what happens when a few years down the line you run out of processes to outsource and branches to close? Where is the long-term strategy plan in that? Where is the long term investment? Where is the analysis of the long term consequences of such a strategy?


Call me weird, but it doesn't take a genius to figure out that reducing costs by firing people improves the bottom line: any MORON can deduce that.

What the said moron will fail to address of course is the problem created a few years later when the bank needs to improve its public relations image and there aren't sufficient people and branches around anymore who know how to do that!


But of course: in ALL these instances, what you find is that the manager or CEO responsible for such a policy will have retired by the time the consequences of the "strategy" come home to roost.


It's what I call the "hit and run" management strategy: make a big splash with something that is simple to implement, - even if obviously WRONG in the long run - collect the kudos, and disappear into the sunset before anyone can blame you for what you did.


Something that Gartner and so many other "analysts" have been promoting for the last 10 years or so.


Wrong. And the price for that myopic strategy has now started to be collected. Watch the proceedings, it's gonna be fun!

8:22 PM  
Blogger Teko said...

Today outsourcing is getting cheaper and cheaper.
Maintenance and support is expensive.

7:42 PM  
Blogger Bill S. said...

I have been the the victim of both outsourcing AND insourcing. I always found the subject of outsourcing to be comical at best, inefficient at worst. I still fail to understand how having someone with no loyalty to you or the company working on mission-critical projects (just so you don't have to pay for bennies and thus can claim a budget savings) makes any sense at all; said contractor can walk at any time (taking all that knowledge with them) with nary a qualm - they don't WORK for you, they merely do work for you.
One place I worked as a contractor (no names, but you'd recognize them if I described them) was outsourcing much of their internal development work to overseas coders. Problem was, most of the deliverables were being re-coded by in-house programmers working o/t on deadline because the code was so bad and deadlines had to be met. The overseas coders were making what equates to MUCH less than minimum wage in the U.S.; the in-house developers were needless to say making a great deal more than what the overseas coders were making. But the internal development department could not terminate the outsourcing contract because of corporate-mandated budget restrictions and vendor requirements. Go figure.

7:02 AM  
Anonymous Taras Balderdash said...

As ambassador of the People's Republic of Elbonia I want to express my outrage at the assertion that outsourcing is somehow 'out'.

If it is, we will have to return to herding mud.

This will not do.

Taras Balderdash
Ambassador
Elbonian Embassy in RL

6:21 AM  
Anonymous marco bello said...

os is out?
not the thing I'm seeing, but nonetheless, it will be interesting to see if it really goes out. or at least slows a tiny bit down.

eventually it will be out for some countries(like india) and in for others(like china). just read how bad the infrastructure is in india and how good it is in china. long-term, it will make THE difference.


(please leave the emails... they are a spam trap for a software I am writing. thanks)
ibm_test@equinoxe.de
ibm_test@equinoxe.biz
ibm_test@equinoxe.com

8:08 AM  
Blogger Roger Snowden said...

Management follows fads and fashions as much as anyone. Today, something is is, tomorrow, it is out.

Once in a great while, someone will actually do the analysis and make an intelligent decision, often contrarian.

10:37 AM  
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6:14 AM  
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4:14 AM  
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3:53 AM  
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10:20 AM  
Blogger obackoffice said...

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4:42 AM  
Anonymous Anonymous said...

For outsourcing chat, email or back-office support

If you are considering offshoring your processes, or would just like to know more about the various BPO / KPO services that can be outsourced to us in India, kindly contact

us and our customer service representatives will get back to you soon.

For outsourcing chat, email or back-office support, visit the website: http://www.outsourcebackoffice.com

2:37 AM  
Anonymous Anonymous said...

Outsourcing is one way of moving US money to an offshore.

(1) US Company hires a company offshore to get the job done at a lower cost
(2) Offshore company employee gets the job from US employees.
(3) Company saves $$$
(4) US employees no more job. Then no more money to pay mortgage.
(5) Due to the # of employees unable to pay mortgage the housing bubble pops.
(6) Houses get forclosed. Prices of houses go down the drain as well.
(7) US economy that used to depend on housing increase now goes down as well.
(8) The value of houses of CEOs, CFOs, HR offices go down as well. GOOD FOR THEM FOR NOT THINKING the ripple/domino effect of TOO Much outsourcing.

10:34 PM  
Anonymous Anonymous said...

Iwebresources: Looking for some IT projects.

Interactive Web Resources is an outsourcing company focused on serving the needs of Small Medium & Large size Businesses in the U.K, Australia, U.S, Europe, Canada & English speaking countries.

Interactive Web Resources as your outsourcing partner help's you to increase your profits, reduce business risk and create breakout value with new services and revenue streams.

IT Out sourcing Is Our Business
We are a Delhi based IT out sourcing company. Providing quality IT related services have been our focus ever since May 2004. From web site designing to web support, we deliver cost effective and reliable systems.There is no doubt that IT out sourcing is a most effective way to stretch your budget.

Whether you need any type of IT related services we have what you need at prices you can afford At Interactive Web Resources, our goal is to provide you with courteous, expedient, professional service of the highest caliber. Browse our Web site for more information about Interactive Web Resources. At Interactive Web Resources, the customer always comes first. We serve you Better.

Our Focus
Our focus is to serve the most professionally managed Overseas companies / Leading IT Companies / MNC's and Any type of company, who demands IT related services of highest standard & wants to avail the same with a difference.

We provide professional services in: -
* Data Entry & Copy Writing
* Web Designing & Web Promotions
* Content Writing
* Graphic Designing
* E-Commerce Solutions
* Web Support
0* 24/7 Live Support
* You Name A Service & We Render It.

Email: iweb02@gmail.com
URL: http://www.iwebresources.com

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3:26 AM  
Blogger kayal said...

Outsourcing software development has made it convenient for the gigantic organizations based in the developed nations to get their software needs fulfilled from the best companies and that too at a moderate rate. Luckily for them the best software companies located in cheap countries like India, also have their presence in their very own country.

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