Has outsourcing failed ?

[zippy]

2 Interesting articles which raise this question.

http://www.bbc.co.uk/news/business-24962989

http://www.bbc.co.uk/news/uk-politics-25884915

Also, looking at the Obama care and UK NHS debacle, it seems there is a feeling in some circles that outsourcing has failed.

What is the South African experience ?
What does this mean for us developers ? Is it better to have these large IT companies, or is it better to have many more in-house IT dev shops ?

 

[AWD]

Hardly just an easy cop out shifting blame, with correct budgets, planning, project management and scoping the client is as much to blame as the IT company. Does it matter if it is outsourced or in house or is the blame / outsourcing tarnish brush is painted as the staff are not in house and the project is a failure ? what about companies with in house IT departments that fail to produce a new front end that throws plenty of eggs on the face ?

If the expertise and capabilities are not there the project will fail regardless if it is in house or outsourced. You also cannot expect a large software project too be run and managed by non technical people with little or no project management experience.

Crothers said a supplier tried to charge £65 for a laptop power cable worth around £20.

You get bad boys every where and some build million rand wordpress sites Skellems are everywhere however I don't believe the solution is to manage it in house as this will bring down expertise coupled with an inflated budget.

Bottom line - "failed" - is past tense right so it has happened ?

Buy smarter - work hard and deliver code free work

 

[Gnome]

Sounds like something one of my previous managers used to say "work smarter"

Total BS.

If you company is selling a product using IT, eg. a bank, then it is a mistake to outsource it. If you outsource a non critical system, then sure, that I can buy.

Cloud computing architecture is likely how the "smart" companies will move forward. Have a small skilled in house IT department that focuses on the software and the rest is "outsourced" to the cloud company.

 

[noxibox]

Neither way is inherently better regardless of what the software is for or whether it is critical.

 

[koeksGHT]

Well SA is the outsourcee Labours decently cheap here

 

[froot]

Outsourcing is done for very specific reasons. If it fails, you've gone and chosen the wrong reasons to justify the need to outsource.

 

[zippy]

Well SA is the outsourcee Labours decently cheap here

Looking at recent SA govt projects(jhb metro), that's a reason not to outsource

And I'll bet you don't hear about the private sector cock-ups. Believe me its not just govt that screws this up.

The problem, I think, is when large organisations outsource, they fail to employ the right people to manage the relationship. In-house IT dev shops work because the developers spend a lot of time on the systems and therefore the developers tend to become very knowledgeable about the organisations business processes. One of the biggest frustrations that developers have working in an in-house IT dept, is the bad quality of specs(if you can even call some these docs a "spec").

When organisations outsource, they don't compensate for this. They also think they have "outsourced responsibility" and non-IT senior managers think that the SLA will cover their backs.

The other problem is that when there is a general downturn, if you have outsourced your maintenance, then its easier to cut back. This is what is happening to some of the UK Banks. If you look at the UK banks who have problems, they where the ones which had to be bailed out and they went through large retrenchments and cost-cutting. This cutting back becomes a habit. And then one weekend your systems fail big time. You phone your outsourcee and they say, sorry you re-negociated the sla to cut costs and now there are only resources which can respond in a few days time. So now, panic mode sets in, and one of the responses is what we saw when the jhb metro accounts details bug was uncovered. Blame someone else.

As a developer, one of the problems I have with the way outsourcing is implemented, is that it focuses jobs into fewer companies. This means its harder to move around. I think this depresses our rates, because we have fewer alternatives.

Look at the rates for developers in India. Very, very low. In the UK, there is a bit of backlash to this, because these low rates have over a long period of time, meant that the quality is also low. The skilled developers in India end up the US, UK and Australia because they aren't willing to settle for the low rates for too long.

If SA becomes a potential outsourcee then the same thing will happen to IT in SA. Yes, the industry grows. But the developers lose out because it becomes a factory production line of mediocre output.

 

[noxibox]

Over the years I've been involved in several outsourced projects where one of our teams went in to rescue a large company from the monumental mess their internal teams had made of a major project. However in only one case was the failure due to complete incompetence at the developer level. In a particularly bad case the management incompetence went right up to the top. All of them were cast out to be replaced by an outsourced team to cover repairing the management, and developers skilled in proper project development to get the company's developers back on track. They actually had an exceptionally good team of programmers there.

South Africa has been an outsourcing destination for at least a decade. It doesn't lead to lower pay or lower quality work. India's pay is low relative to the UK because labour is cheaper there. The work quality is low because many of their programmers work in a hostile sweatshop-like environment. I've seen a company turn a bad outsource team around by sending their own manager to India to clean up the work environment - sensible working hours, not treating the employees like trash, and so on. They then periodically sent someone over to monitor the situation to make sure the local management was not reverting to their old ways.