Listening to an interview on National Public Radio the other day, I was struck by a comment made by one of the experts discussing the BP oil disaster in the Gulf. The person said that the reason Exxon had a better record on disasters than BP was it had its own engineers whose responsibility it was to second guess their sub-contractors. BP, he said, didn't do this. It got me wondering what kind of oversight companies have of their IT outsourcers. Do your in-house experts keep tabs on what is going on? If not, should they? Do you rely too much on what your outsourcers say they are doing when it comes to security rather than having in-house experts check it out?
This is why there are so many outsourced project failures, right? The person outsourcing thinks that IT is easy, and it is just a line item. They outsource to the cheapest bidder, and well, you know the rest. The problem is that small startups that are cash strapped fall for this all the time. By the time, they realize that a mom-and-pop shop half-way across the world is incapable of handling the project, it is too late.
Well as a long time consultant I know the feeling. There are many projects which I would not have been on if not for other contractors screwing something up (And thank you for that as it paid my bills). The better consultants know how to not only perform the technical work but also to integrate the company in with their systems and to make sure that when we do leave that the systems will be well taken care of. The companies that don't do this naturally should be watched carefully as there is typically a reason they don't want you so close to their work..
The answer in most companies I believe is that they do not retain sufficient in-house expertise to review the work of outsourced partners; in-house staff are usually tasked with their own deliverables and as a practical matter it becomes impossible to assess the outsourced contributions other than at the highest project plan/functional checklist level. Retaining talent to perform such a function undermines the cost benefit of outsourcing, but also sows the seeds of long-term failure for the outsourcing relationship. Few failures are going to be as noticeable however as the BP situation is.
Outsourcing is very difficult – the key is to take a component and document it to such a detail that the person with little English-language knowledge can understand. And then, you need to fly to wherever the outsourcing is taking place to make sure they don’t screw up. A number of companies are making money (Accenture) by managing outsourcing efforts. You outsource your efforts to manage what you outsource to begin with. Do you see the vicious circle? I have had no good experience with outsourcing other than the situations that I was intimately involved in the process from the beginning.