December 3, 2008 at 9:40 am
Cade Roux (12/3/2008)
When outsourcing, ... you trade business knowledge and loyalty to the success of your business for specialized expertise and fungibility. Every dollar you spend outsourcing is a dollar you aren't investing in your company because you are paying rent to another company.
Thank you for the way you worded this; it is probably much better than what I was thinking of writing, but didn't quite know how to say. I recommend your entire comment!
Personally, I have worked for three different organizations the have attempted outsourcing, both foreign and domestic. None were even half baked. Problems abound. Loss of ownership and detail happens quickly. And I have yet to see it replace jobs, not that I'd protect that... one would hope that all businesses would gain and strengthen from such decisions.
Might you share just a bit of detail with how the one successful outsourcing you mentioned left the norm?
December 3, 2008 at 9:46 am
I see the shift of a traditional DBA role into DBA/Developer role in most companies especially medium and small size companies.
December 3, 2008 at 10:05 am
Might you share just a bit of detail with how the one successful outsourcing you mentioned left the norm?
Sure. You should know that I am not a DBA but I do quite a lot of the "DBA architect" role - design/build/tune/automate - at this gig I was the IT director at the end of an 11 year stint where I had worked my way up to that position. I am an IT generalist, with a lot of development experience, particularly with SQL Server and most Microsoft technologies. Right now, I'm a SQL Server Data Warehouse Consultant, primarily building and converting business processes to SQL Server.
To start with, it wasn't outsourcing. It was a wholly owned subsidiary. There was no profit being recognized by another company. I had an oustanding DBA (Indian H-1B) who also helped manage our accounting system (I had a team 5 of network admins who covered all the various systems with good overlap, so the DBA also did a lot of other Windows admin things from time to time). There was a lot of keypunch in a few areas which could benefit from cheaper offshore labor. An overseas group was set up and the work was done there. We paid their actual costs and salaries were paid locally, but passed on to the corporate parent.
NB: There WERE some clerical jobs lost in the process, although some of those people were transferred to other departments.
After new management came in (we went through Katrina, a special counsel investigation, and a bankruptcy), they "outsourced" it to another Indian company who took more people to do the job (than either the inhouse Indians or the previous Americans) and still didn't do it as efficiently or as well.
I understand a recent attempt to outsource the helpdesk to the same Indian company resulted in a customer revolt about a week into the effort.
We had previously tried to outsource our level-1 support to Entex about 9-10 years ago. They had a custom application desk and I went up there and trained their people, but ultimately, they didn't work out, although the customer revolt was not as instant. In my experience, there are very few things you can really outsource successfully, and management keeps on having to learn this lesson over and over again. There is nothing more valuable than people who understand their business - although outsourcing providers pay lipservice to that, you cannot serve two masters.
On a related note, about six months after the new management came on I left, as well as most of my staff, although there are still a cadre of exceptional developers there, the netadmin team is long gone, and from the sound of things, it's pretty much been down hill from there.
December 3, 2008 at 10:34 am
Cade Roux (12/3/2008)
To start with, it wasn't outsourcing. It was a wholly owned subsidiary. There was no profit being recognized by another company. I had an oustanding DBA (Indian H-1B) who also helped manage our accounting system (I had a team 5 of network admins who covered all the various systems with good overlap, so the DBA also did a lot of other Windows admin things from time to time). There was a lot of keypunch in a few areas which could benefit from cheaper offshore labor. An overseas group was set up and the work was done there. We paid their actual costs and salaries were paid locally, but passed on to the corporate parent.NB: There WERE some clerical jobs lost in the process, although some of those people were transferred to other departments.
Thank you! Very speedy and detailed response. Also nearly exactly what I expected, as you said it started as, "It wasn't outsourcing" and also, "It was a wholly owned subsidiary."
Raw data entry outsourcing can and does work, when all the technical decisions are still owned in-house. At that point you are just looking for bodies to fill seats and essentially robo-tize the work. But even this level must be carefully scrutinized.
It is the when a company expects it's core operations and technical know-how to be successfully and more cheaply run by a 3rd profit-bearing party that I have yet to see be very effective. Getting off the ground from a start-up, maybe, but core intelligence grown must be in-house or the company will suffer, either by wasted revenue or lost opportunity costs. And fixing this entrenchment can hurt a company for years.
December 3, 2008 at 11:46 am
Loner (12/3/2008)
I see the shift of a traditional DBA role into DBA/Developer role in most companies especially medium and small size companies.
That is certainly the case where I work. We all have to wear a lot of different hats, but most of us here were hired with an awareness of that.
December 3, 2008 at 12:55 pm
mhaskins (12/3/2008)
cy (12/3/2008)
you lose that sense of someone constantly asking "are we doing this the best way possible?". The result may be that things become stagnant and even inflexible.I don't agree. If Microsoft is forced to eat their own dog food, you may see more and better changes to their products. You may find that they have more of an idea of how thier products can be bettered for use.
One could hope that is the case. I was speaking more from personal experience. Plus, whose to say MS won't contract this work out themselves??
December 3, 2008 at 10:01 pm
Let's hope they don't sub it out. That would defeat some of the purpose of them using their experience.
December 4, 2008 at 11:27 am
As has been mentioned already, I love working myself out of a job. I've just about done that with my current employer, and I'm just about ready to move on.
There are plenty of things I'd love to automate even more than is currently possible. In some cases, outsourcing can take the place of automation, and vice versa.
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