Tag Archives: outsourcing

Thomsett on Outsourcing

Outsourcing: The Great Debate

Notable points and some that remind me of my own experiences:

  • the difference between process and project work, and how most other industries outsource the former – but in IT the latter is often outsourced
  • “squeaky wheel syndrome” – outsourced functions’s success may be improved by the increased attention given to them by the outsourcer’s management simply due to the cost/contracts involved
  • outsourcing organisations typically track work much more accurate than internal departments (who often have “hidden” work), so it’s difficult to compare and measure success
  • arrangements sometimes start with the outsourcing organisation’s top staff working on the project, but over time these are replaced by lower-skilled staff
  • loss of intellectual capacity – if the outsourcing involves transfer of staff, the best staff are the ones most likely to leave for other companies, leaving an averaged-down group
  • the outsourcing organisation’s lawyers are likely better/more experienced in the area than the outsourcer’s
  • potential loss of intellectual capital (see IBM-Microsoft)

The role of the power-distance index (PDI) in software outsourcing

An excellent post by Dave Rodenbaugh on one of the cultural issues of outsourcing (specifically offshoring) in his post about why outsourcing continues to fail.

The subject is the Power-Distance Index differences between providers and suppliers in different countries, and how this can affect things. In a nutshell, most countries who do cheap outsourcing are high on the DPI index, meaning that they don’t “tell things as they are” in the way we do in low-DPI countries, in particular when reporting status/problems to project managers.