Monday, June 7

The Dirty little secrets of IT outsourcing By Nick Eian

Nick Eian , the CEO of Endurant Business Solutions, a consulting company that helps businesses, executives and entrepreneurs with organizational and technology challenges writes in Startribune [Dirty little secret of IT outsourcing ] :
While U.S. companies believe they're outsourcing to save money by employing workers with lower hourly rates in other countries, they're really fooling themselves. Project costs will begin to soar when they try to fix the predictable problems that occur with developers abroad (some are calling this "onshoring"). All the global outsourcing accomplished was to delay the inevitable reconciling of bad management practices, which can range from obsolete work processes to poorly defined goals.

In some cases, U.S. companies think outsourcing means they can radically speed up the development process. They throw more lower-paid offshore developers at a problem in an effort to get the project finished faster. That's sort of like thinking that nine pregnant women can get together and produce a single baby in one month. Obviously "more" doesn't mean "faster" when there are well-defined developmental steps that must be followed to produce a healthy result.

Outsourcing should be the result of a strategic business decision, after careful analysis proves that it's the only way to cut costs or access crucial raw materials. Instead, the decision to outsource frequently is made by frustrated corporate executives who are looking for easy solutions to tough problems.