Been there, done that, got a picture.

Been there, done that, got a picture.

Individual sourcing examples reflect a number of popular myths about outsourcing.  These also provide a fertile ground from which to learn from those that have done it well and those that have done it less well.  Some of the following myths are related to those presented before.

Myth:  “IT is like a factory — raw materials and plans go in and product is delivered.” The factory analogy has been with us for a long time, evoking the images of assembly lines.  Components are cobbled together into a product that can be delivered.  Conceptually, the idea is alluring, bolstered by the use of objects, components and COTS product, but the analogy only works to a point (assuming your processes actually leverage items that can be assembled).  There is still a great deal of creativity, integration and customization required to deliver a functional product to users.  In applications that can be assembled, a more accurate analogy would be that of mass customization.  A common core is presented with a custom wrapper that meets specific business and competitive needs.  The mass customization view could easily be accomplished by the assemblage of multiple subprojects using all common sourcing scenarios and embracing the use of creativity.

A further problem with the factory analogy is the myriad of one-time projects, designed and developed to address rapidly evolving needs.  These do not make sense in an assembly line or mass customization model and are much close to the model of craft labor currently employed in most IT organizations, regardless of where they are deployed or who is actually doing the work.

Both the craft labor model and the mass customization models require skilled, intelligent labor forces with close relationships with their users.

Myth:  “Sourcing is like buying pencils, I fill out the request and resources appear.”  Sourcing work is substantially more complex than that of the routine acquisition of most common tangible items.  Complexity causes the need for significantly more upfront definition and management.  Additional procedures in the acquisition process must be developed. These include gathering needs from internal stakeholders while not ignoring the knowledge that can be gained from the purchasing model which includes the knowledge of contracting, controlling payments and leveraging  the power of the RFI process to drive out in-depth information.  Interesting firms regularly leverage all of the ancillary process to develop sourcing agreements, then fall prey to business as usual (or worse yet, merrily paying invoices without linkage to delivery) when managing the process.

A corollary to this myth is treating outsourcing like purchasing services or staff augmentation.  The acquisition process must reflect the need to assess a broad range of skills to requirements of a project or group of projects.  Processes described in the Supplier Agreement Management (SAM) and Integrated Supplier Management (ISM) process areas in the CMMI provide a standard framework to help focus on organizations on developing and managing supplier relationships.

Myth:  “Changing sourcing options is a quick fix for the chaos going on in my IT department.” This myth is a variant in the quest for a silver bullet (no vampires need apply) for improving IT.  Organizations are affected by failures within their IT organizations for reasons too numerous to be addressed here (see the Chaos Report for an exhaustive discussion).   Using a sourcing solution to correct problem/problems within your IT may actually be the right answer; however, if it is used as proxy for actually managing, it is exactly the wrong answer.  Outsourcing makes a lot of sense when used to address specific needs or knowledge holes.  Using outsourcing options to address systematic management problems typically only serves to change the enemy.  This is most true when staff acquisition models of outsourcing are used.  These types of changes force the outsourcer to deal with the problem rather than addressing it himself. When using outsourcing as a tool to address perceived chaos or management issues with an organization, the first step should be a deep self-analysis.  Are you just trying to make someone else deal with a hard management problem?

When outsourcing is done to alleviate problems caused by the interaction of IT and the user community most organizations find that separating the two communities will not solve the communication problems and could even exacerbate them by making the communication lines longer. Interestingly, you can buy time to make organizational changes through outsourcing.  Change often introduces a honeymoon period that can be used to solve the real problem in a less direct manner.  Given the number of sourcing options, if you can create one honeymoon after another you could avoid solving your problems for a very long time.

Myth:  “Outsourcing is only a stopgap measure to increase productivity.” Get over it, the world has changed.  Outsourcing is a primary tool used by CIOs to manage their portfolio of work.  While it may not be a perfect tool, it is useful a tool for more than just managing productivity.