Interaction of team members yields productivity.

Interaction of team members yields productivity.

Over the past eight days we reviewed the myths of outsourcing.  It has generated more than a few responses and Skype conversations, and I missed two myths. I suspect that I have missed many more and stand ready to add to the list.  The missing myths revolve around teams. Teams are a normal feature of all IT organizations, whether we build or maintain code or are network engineers. Outsourcing changes the effectiveness of any team it touches.

Myth: “Distributed teams must leverage waterfall techniques.” The rational for this myth is often attributed to time zones, language or accent differences.  But, distributed teams comprised of members of both the outsourcer(s) and the outsourcee can work in a collaborative, dare I say, Agile manner. The distributed nature of the team makes working as a team significantly more difficult. This is even truer when organizations are newly mixed. Most of the potential complications impacting communications can be solved by:

  1. Identifying and focusing on a common goal,
  2. Concentrating an effort to personalize each team member, and
  3. Synchronizing the work processes.

Myth:  “Distributed teams are just as efficient as those that are co-located.” We discussed the impact of distributed teams  on making decisions. Distributed teams must expend significantly more effort to stay synchronized, if for no other reasons than the length of the communication lines.  A distributed team needs more time and effort to communicate than the same team would need if they were sitting in the same room.  That extra effort typically reduces productivity. For example, if one function point of functionality required 40 hours of effort to deliver before outsourcing and then when the work was outsourced it took 30 hours to deliver a function point, the organization would have become more efficient. Anything that decreases the amount of effort needed to deliver a unit of work increases efficiency. In outsourcing scenarios, organizations often redefine  efficiency to mean the ratio of output to cost. One of the primary reasons organizations choose to outsource is to lower the cost basis of work. The reduction in cost is interpreted as an increase in efficiency, which may or may not be true. For example if a function point requires 40 hours to deliver before and after outsourcing, the labor efficiency would not have changed. However if the cost for the function point originally was $4,000 USD and then after outsourcing the cost falls to $3,000 USD, the cost efficiency would have improved. The rational for shifting from effort efficiency to cost efficiency in this scenario is that an organization focuses on measuring the efficiency of how it uses its own resource to deliver output.  Money is the resource being used in the case (really a combination of money and internal effort to manage the outsourcer). Ignoring effort efficiency hides potential issues that could be exposed if the cost of developers between the outsourcee and outsourcer normalizes.

A note on the idea of efficiency: While measuring efficiency is important, a more important measure is effectiveness.  Effectiveness measure the value delivered per unit of input (effort or cost based on the discussion above). I am sure I have not explored all of the myths of outsourcing. What are the myths that you have seen? For example, have you seen the terms outsourcing and off-shore conflated?