What’s the first thing the outsource vendor does?

” Peo p [e a ne ki dd i n $ themselves. rt sounds so good- just pay a fixed, known amount to some vendor for your computer infrastructure, and all your problems go away. Everyone has the computers they need, the network never goes dolvn, and you never have to endure another horrible meeting about network protocols, https, and the latest worm. You’re off into information systems nirvana. . . .

“Except it doesn’t work that way. You trade one set of problems for another. Consider the outsourcing of com- puter infrastructure. What’s the first thing the outsource vendor does? It hires all of the employees who were doing the work for you. Remember lhatlazy, incompetent net- work administrator the company had-the one who never seemed to get anlthing done? Well, he’s baaaaaclg as an employee of your outsource company. Only this time he has an excuse, ‘Company policy won’t allow me to do it that way.’

“So the outsourcers get their first-level employees by hiring the ones you had. Of course, the outsourcer says it will provide management oversight, and if the employees don’t work out, they’ll be gone. \Alhat you’re really out- sourcing is middlelevel manage- ment of the same IT personnel you had. But there’s no way of knowing whether the managers they supply are any better than the ones you had.

“Also, you think you had bureaucratic problems before? Every vendor has a set of forms, procedures, committees, reports, and other management ‘toolsJ They will tell you that you have to do things according to the stan- dard blueprint. They have to say

that beiause if they allowed every company to be different, they’d never be able to gain any leverage themselves, and they’d never be profitable.

“So now you’re pa)lng a premium for the services of your former employees, who are now managed by strangers who are paid by the outsource vendol, who evaluates those managers on how well they follow the outsource vendor’s profit-generating procedures. How quickly can they tum your operation into a clone of all their other clients? Do you reallywant to do that?

“Suppose you figure all this out and decide to get out of it. Now what? How do you undo an outsource agreement? All the critical knowledge is in the minds of the outsource vendor’s employees, who have no incentive to workforyotr- In fact their employment contract probably prohibits it. So nowyou have to take an existing operation within your owrr

Source; AlexRoz/S h utterstodk


company, hire employees to staff that function, and relearn

everything you ought to have learned in the first place.

“Gimme a break. Outsourcing is fool’s gold, an expen-

sive leap away from responsibility. It’s like saying, ‘We can’t

figure out how’to manage an important function in our company, so you do it!’You can’t get awayfrom IS problems

by hiring someone else to manage them for you. At least you

care aboutyour bottom linel’