A few weeks ago I read Bob Lewis’ Outsourcing Debunked: What’s real and what’s baloney in IT’s longest-running controversy.
Ah, outsourcing … “the dreaded O-word”… “Its mere mention is enough to strike terror in the hearts of IT staff, conjuring images of layoffs for many and sweatshops for those who remain”, Lewis muses in his opening. He then proceeds to attack outsourcing in his humorous style, peppered with his “ManagementSpeak” and its “Translation”.
ManagementSpeak: “It’s a high-level model” / Translation: “It’s wrong”
ManagementSpeak: “We’re refocusing our core competencies” / Translation: “We’re getting rid of anyone we don’t like”
He argues the popular rationale behind outsourcing – the Core/Context Theory, i.e. focus on core competencies and outsource the rest – seems to have absolutely no supporting empirical evidence of success. He states the perceived payoff is little more than an accounting shell game where “a transfer of capital assets … front-loads the benefits and backloads the costs”.
He says CEOs get into outsourcing deals for the sole reason that they have given up on their internal IT. And there is a good bit of truth to that, but there’s also the utility theories promoted by Nicholas Carr and the whole capital economy vs. labor economy argument that Lewis makes later in the book. Regardless, he makes effective arguments against the bumbling usually surrounding the IT outsourcing process.
Lewis also addresses the offshoring myth and its effect on us: “Our economic recovery isn’t, as it turns out, jobless. It’s creating jobs. But they aren’t here.”
He also discusses some insight for an outsourcing “vaccination”, such as…
- “Track service levels, but dont negotiate them. The process of negotiating service levels provides no benefit and carries plenty of risk. Negotiating service levels means youre negotiating with the rest of the business. That separates you from everyone else, makes you look and and sound like a service provider, and establishes precisely the gap between what you provide and what they want. Its another way to make to make them customers and yourself into just another outside supplier which eases the transition to an outsourcer model.”
- Agile methodologies don’t lend themselves to offshoring. They require “up close and personal”.
- The business equivalent of a prenuptial agreement is essential.
In his book’s introduction, Lewis says “this is an experiment” -a collection of columns from “Keep the Joint Running”, his InfoWorld column/blog, and his book IS Survival Guide, which I read ten years ago. Unfortunately most of the content is old. It’s correct that, as he states, most of that content “has stood up to the test of time pretty well”, but it is still depressing reading old retread where, as he again says, “continuity is more a matter of accident and good luck than of planning”. Yet none of this is a surprise as all of this is made clear in the book’s description.
All-in-all, “Outsourcing Debunked” is a short, cheap cynical book on IT outsourcing and well worth the read. I rated it 4-stars on Amazon.