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Early in my career when I encountered outsourcing initiatives I perceived them as management choosing cost over quality. A couple of decades later my view has
by fallous 7y ago
Early in my career when I encountered outsourcing initiatives I perceived them as management choosing cost over quality. A couple of decades later my view has changed on that mostly thanks to having worked more directly within the management structure of numerous companies (ranging from startup to ConglomCo Megasized).
In most cases those making the decision really believe they can achieve comparable results by outsourcing while also taking advantage of global wage differences and also converting the continual overhead of personnel into just-in-time overhead that only has to be taken on as needed. This is not unlike the devops trend towards using cloud-based infrastructure.
The problem is that the thinking that you achieve comparable results by outsourcing is woefully naive. In-house teams have a vested interest in understanding the business problems as well as filling in the communications gap between what is asked for vs what is actually desired as an outcome. Outsourced contracted labor does not share those same interests.
Additionally, when you outsource technical labor you MUST have the ability internally to create very good designs, specifications, and oversight/feedback mechanisms to ensure that you're getting what you wanted rather than what you asked for via sloppy communication. For those companies that have previously had internal teams and decide to transition to external resources they almost never have someone with that ability and in fact are unaware of the impedance mismatch between their asks and the results delivered by internal teams.
Outsourcing means trading the overhead of personnel costs for the overhead of a much more complex and difficult communications burden. It is extraordinarily rare that the company that opts to transition from internal to outsourced talent has the capability or even awareness of that trade, resulting in predictably poor results.
- ScottBurson 7y agoThis seems to happen when software companies start to be run by people who have never written code. (I'm sure the observation generalizes to other forms of engineering, but software is what I'm familiar with.) They tend to perceive the work through a very shallow lens. They see that time is spent and code is produced, and they think that that's the essence of the process. What they don't see is all the knowledge that goes into building systems that work well; they have none of that knowledge themselves, and so it's invisible to them. They don't know the difference between a well-written program and a badly-written one, so it's easy for them to think they're getting the same results for less money by outsourcing.
- goatinaboat 7y agoAdditionally, when you outsource technical labor you MUST have the ability internally to create very good designs, specifications, and oversight/feedback mechanisms to ensure that you're getting what you wanted rather than what you asked for via sloppy communication In fact there’s a word for a person who can translate vague business requirements into precise, unambiguous language. Programmer. Of course to a manager a programmer just looks like an expensive typist, one who uses too many semicolons.
- fallous 7y agoIn fairness to the hypothetical manager, there are plenty of people with the title of programmer who are unwilling/incapable of such translation. If it were merely sufficient to speak with Area Programmer(tm) then outsourcing would be perfectly fine.
- swagasaurus-rex 7y agoEven if designs are done in house for outsourced production, it's stealing a great resource away from the designers: feedback. They never see the process it takes to be created, the communication pipeline between the designer and builder is throttled, their designs are only tweaked when large or obvious flaws are found.
- akitzmiller 7y agoThis is a wonderful comment. I think someone on this site said that coding is the process of understanding the solution. This is what that means.
- fallous 7y agoIndeed. They are also additionally constrained by their knowledge and understanding of the universe of possible solutions rather than being able to draw from the larger combined knowledge pool of themselves and the builders.
- deleted 7y ago[deleted]
- sgt101 7y agoThere's another wrinkle : sometimes people outsource problems. "This process/system/unit is a constant source of trouble, other people do this well, we can't.. let's outsource it". The pattern here is that the constant complaints go away (or at least the outsourced company is now the "sin eater" and you aren't on the hook). But of course, there is no incentive to actually fix what's gone wrong, in fact the opposite is true... and so these problems stay on the balance sheet for years and decades more than they should, soaking cash that could be used for investment and dragging business performance down. But there is no way out of this tarpit - all hope of actually dealing with the problem goes with the signature on the outsource contract.