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Desperation Outsourcing

Did you just stand by and let it happen?

By Susan Cramm

June 01, 2004 — CIO — We’ve all seen desperation outsourcing rationalized under the guise of strategy. But these "strategic initiatives" really are ham-handed attempts at rectifying larger ills. The changes are made, different symptoms of the underlying problems emerge, and the root causes remain unresolved. Deployed in this way, outsourcing is a waste of time and harmful to the productivity of the enterprise and the lives of the people involved.

That doesn’t mean that outsourcing (or its varieties of extended staffing, cosourcing, shared sourcing and offshoring) is necessarily a bad thing. It’s a powerful tool—but one that is dangerous in the wrong hands. My assessment is that the executives sponsoring hurried, across-the-board outsourcing initiatives are desperate—busy, scared, frustrated, tired and naive.

Regardless of their motivations, they need some help. If you are a stakeholder of an organization considering outsourcing, you need to get involved, not assume a wait-and-see posture.

Let’s review a real-world, real-time case study. A Fortune 50 IT executive is currently in the process of outsourcing his function. After many years of neglect of IT, the past five years have brought substantial increases in funding, headcount and demand. IT is challenged with lengthy approval processes, increased financial scrutiny, strict headcount limitations and decentralized business clients who have authority to make decisions in every area—except IT. The IT executive in question has a poor reputation for delivery and is becoming desperate.

Outsourcing might be able to help address some of the issues raised. In combination with offshoring, outsourcing can get more IT for the money and reduce headcount. It’s also possible to leverage outsourcing to improve process discipline and, thereby, project delivery. The desperation play of the IT executive lies in the assumption that current internal resources are substandard and that across-the-board outsourcing is the only solution (the "better gene pool theory").

Everyone who works with this IT executive has concerns, but so far, all parties are keeping their distance. His supervisors are letting him develop the concept with the confidence that they will have the final say. His peers assume that calmer (senior) heads will prevail or, failing some intervention from the top, that they will deal with the changes if and when they come. And finally, his subordinates are frustrated that they are not involved.

While it’s true that this IT executive has disregarded the spirit and practices of change management, it’s also true that the rest of the leadership staff is guilty of benign neglect. They talk among themselves while their desperate colleague is giving speeches, pushing forward and slowly destroying (both himself and his organization).

 

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