The Outsourcing Mantra

I have always wondered if the word ‘outsourcing’ was invented to legitimise the  industry that we have created around it.  Often times, words have this power to mesmerise and to allure and to portray what isn’t. And words have this euphemistic power, to project by association, a virtue that does not exist.

The term ‘body-shop’, which sounds very gross today, was in vogue in the 80s and 90s. It was an accurate description of many companies whose only business was to loan bodies out to other companies that needed them, for whatever projects they wanted to use them for.  The body-shop would tout every individual’s skills as its own although it would have had very little to do with their acquisition, and as an organisation, would generally have little or no understanding of these skills, except as saleable traits.

Several of India’s outsourcing companies continue this business of body-shopping, although it is now referred by various euphemisms – team augmentation, on-site consulting, etc.  This stylised description does not change the basic truth that beyond the knowledge embedded in, and represented by the individuals who work for the company, there is little by way of organisational skills and knowledge – processes, techniques, patents, intellectual property represented by code blocks and algorithms – that the company can claim as its own beyond and above the skill-sets of the individuals in the company.

This is an important reality for buyers of outsourced services. Skill descriptions and experiences touted by outsourcers do not mean much, unless they were acquired as company projects and more than one invidual in the company participated. It is a common practice for buyers to ‘interview‘ individuals whom they would like to hire from the outsourcing company. I think it represents the first false step that one can take in starting an outsourcing relationship, because by doing so, the buyer virtually admits to buying the individuals and demits the seller of responsibility for the project. Instead it would be prudent to examine historical evidence of project execution, artefacts and organisational residues generated from them and interview the management team much more closely to understand the true organisational capabilities the company possesses. Such an act would also, very strongly emphasise their equal share of responsibility for the success of the relationship.

I had had one occasion to consider an outsourcing arrangement to develop an online web book-store. We had decided on the framework to be used and I was looking for companies that would build the application for me. I spoke to several of them and received a variety of proposals, but not one of them pointed out that the framework we had chosen would not scale to the number of books  we had in our catalogue. They had all professed knowledge in the framework because they had employees who had worked on it (in whatever capacity) and that was good enough for them to claim expertise in that area. They had no organisational or management experience with the technology and hence could only rely on the paper skills projected by their employees. Thankfully, we did not outsource on that occasion we executed the project on our own, discovered and fixed the scaling issue and took the system to production on schedule and within budget. I wonder if that would have been possible if we had outsourced, because for sure, if the framework did not scale, the problem would have been ours.

Outsourcing requires a careful consideration of vendor resources, experience and management expertise. Interviewing a few individuals alone is inadequate and would put the responsibility for success entirely on the buyer.

 

 

About Vijaya Raghavan

Vijaya Raghavan has been a part of the technology industry in India for the last 25 years. He was part of the initial teams at Texas Instruments and IBM India and has worked on CAD systems for VLSI Engineering and on applications for Windows, OS/2 and Unix. In a management capacity, he has built and led engineering teams working on object-relational systems, text search, e-commerce systems, network security and various other Internet applications. He is the co-author of an engineering patent in network analysis. His corporate career apart, he has been an entrepreneur in Internet retail in which he successfully built and ran an online book-store for some time. He now consults on new technologies and as an out-sourced CTO to corporations that require advice in the acquisition and management of new capabilities.
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2 Responses to The Outsourcing Mantra

  1. These euphemisms are the jokes in our circles. Consulting reports, most hilarious of them all. :)

    On another note, the post tend to strongly bind body-shopping to the term outsourcing, which is not really true. A company outsources a part of their work to a vendor; but does not outsource a body/head/resource to another. Or least this is my understanding.

    • blogadmin says:

      Dear Sujith, Thanks for your comments. I agree that out-sourcing does not imply body-shopping. My point was to emphasise that many outsourcing outfits are body-shoppers in gentlemen suits. And in my experience, many customers who wish to outsource, have this fixation to interview the individuals from the outsourcing company who will execute their work. Once a customer takes that approach, they de-link the vendor of responsibility for execution and essentially convert the assignment to a body-shop deal. It may prove more rewarding for the customer to award the business to the vendor company and to hold it responsible for execution. In such contexts, management quality is more important than that of the individuals working on the contract. Rgds, Vijay

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