Outsourcing – a harsh task master

Only last week was I reflecting on my past IT exploits and came to the realisation I have always been placed within the outsourcing sector. Often I’ve thought how different things must be when your boss is…. your boss. Instead of a multiple customers who you rarely deal with on a face to face basis.

Life in the outsourcing industry can be tough – as a client you always want to maximise your bang for your buck. You want the best infrastructure and highest SLAs for the lowest cost. Enter outsourcing. Essentially you are alleviating your direct responsibility over a number of facets of your IT – whether its the infrastructure, application or support. This allows a client to drastically downsize any internal IT staff requirements – saving costs.

As a provider you need to deliver a low cost platform or product that is scalable and can be adopted easily. In many instances an outsourcing supplier must leverage a single product across multiple clients – this means costs are spread. The company can build specialised teams delivering the same service to multiple clients without needing to employ multiple teams for each client. I gleaned a number of tricks of the trade from my time.

Lean is the key – running close to the line means a product can be delivered at a market competitive rate. Delivering a low cost solution with potential to build year on is a great method. Sadly running lean usually means staffing levels are limited and your current engineering team really feels the stress.

Staff turn over is high – due to the ‘lean’ methodology and higher stress placed on resources turn over can be high if not managed correctly. The trick is to always provide reward and recognition. If a resource performs work that saves the company money – they should be rewarded. Similarly – if a resource can attract more billable work from a client hence increasing the revenue from the account recognition is in order. Further to this point, company culture should be given plenty of intention – investing greatly in the work force can have good returns for productivity and the moral of teams.

International work force – more and more within the industry companies over products that offer use of an international work force – reducing labour costs. Partly this comes at a cost – I’ve seen this negatively effect the moral of both the clients technical resources and the providers onshore teams. Productivity can also be negatively impacted if language/culture barriers are not addressed and managed. I find if resources understand why a business is shifting to using offshore labour and the reasons are valid resistance will be greatly reduced.

From my outsource providing experience I have felt one notable oddity from the clients – a strong expectation of service quality increase as cost decreases. In some instances this is understandable but in most cases as platform/product requirements increase (due to business growth) you would expect costs to also increase (preferably a slow increase). Clients seem to expect an outsourcing provider to become ‘more efficient’ at providing a service as time passes and as such – the cost should reduce. While I agree somewhat with becoming more efficient – it is impossible to pass on a saving if the client is growing other elements.

I still dream of my boss being my boss though.

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