You don’t hear ICE-T singing about how ”management ain’t easy” , but maybe you should. Maybe that could convince the future generations of aspiring managers to not to think human systems as simple and optimize things based on remote case study results or faulty logic. I have been busy doing implementation work in one project, but still haven’t been unable to hear current stories about misaligned IT efforts and how initial cost cutting measures through outsourcing eventually have turned into expensive dead ends — from which companies had to reverse their way out.
Outsourcing itself is not a bad idea. There are numerous places where economies of scale and ability to use shared expert resources are smart thing to do and drive unit prices down, which in turn can be a way to cut down costs. Outsourcing can also be used to gain access to expensive skills and scale of resources not reasonable to keep full time in house, but then again it will not be cheap.
These expensive outsourcing misadventures were all related to outsourcing something core to the company, namely their core product development. There is nothing nothing wrong in working like that, as long as you know the risks associated with it, can transfer required domain and tacit information and can align external operators to your business’s goals.
And that can be easier said than done.
Actually. Getting rid of your in house technical team which has good set of basic skills, capabilities to learn new things, long time investment in the domain knowledge as well as tacit knowledge of the organization – to replace them with outside consultants with great skills in new technologies, but very limited or no exposure to your domain nor to the organization sounds like something from a Dilbert-strip. Especially if you thought that it would be cheaper.
Creating something new is always hard. To get something great built, you need to have talented and motivated team or teams, whose goals are aligned with the business goals – and with whom you can communicate and collaborate efficiently. Unfortunately there are no shortcuts or magic recipes. And you can fail even with the most expensive outside consultants as you can succeed with moderately compensated in house teams.
One thing I have always wondered is why on earth companies are willing to pay ridiculous amounts of money to outside consultants, instead of originally hiring and compensating exceptionally well a really good in house development team?
I mean there are good reasons why talented developers choose consultancy-work over steady in-house positions: better compensation, ability to play with new toys and changing clients can be a good thing in terms of keeping your ideas and interests alive. But then again at the same time I do know really talented developers, who would prefer to work in one company and to solve big problems there… but only if companies would also compensate for their work better. Going to work for one company would mean choosing much more boring environment, bureaucracy and lower pay – nice deal, eh?
I honestly believe that there are still possibilities to create really cool, interesting and inspiring in-house development opportunities and recruit top talent to work on those interesting problems as internal employees – not as external consultants. It is just tragically funny that I haven’t seen traditional companies try to reach out and recruit people to do cool stuff and change the world ( and to pay accordingly for the job ). If you try to recruit a cog into the wheel, you get just another cog in the wheel…. And then it is left up to the consultants to bring in all the cool stuff and fresh ideas.
But it doesn’t have to be like that.
Luckily these days there are also companies that seem to be learning and seem to understand it might not be a smart thing to do outsource everything. They have learned the hard way that there are aspects of IT where in house development and deep domain knowledge can be used to create competitive advantage with competitive cost structure. In those situations companies also get much more benefit out of the usage of consultants, who work alongside internal team(s) – as deep domain knowledge and technical knowhow meets with fresh ideas and experience from the outside.
I am going back to the IT-consultancy business in december.