Information Technology Reference
In-Depth Information
where it finds it difficult to attract the level of technology skills required
to do a good job. Consulting companies can deliver the skills more easily
from central pools.
Organizations, and for that matter employees, often have a love-hate
relationship with consultants. They sometimes are seen as gurus and
lifesavers; at other times management sees consulting as merely cash going
out the door. Employees may resent the higher rates given to consultants
to do something “that they could have done equally well.” Some organ-
izations have become overly dependent on consultants for their operations,
with employees playing more of a coordination and management role.
The extent to which such a dependency poses a strategic risk depends
on the nature and strength of the dependency. Management, however,
should be evaluating that risk periodically. It may make perfect sense not
to have any of those skills in-house or it may not, but it must be evaluated
and controlled by choice and not allowed to unknowingly develop into
such a situation.
There is an increasing trend, in recent years, to outsource “offshore”
the development and support work of the company. To do this is,
obviously, a strategic decision for company management to take. It is not
easily reversible if the employees who were doing the work previously
have been released. It is not easily reversible for other important reasons
as well. If development work is done offshore, then the knowledge —
both technical and business — accumulates there. What might begin as
a cost-saving measure could lead to a lock-in based on the contractor's
knowledge and experience.
Going offshore is not always about outsourcing. Sometimes it is part
of the normal growth of offices and facilities to newer geographical
markets — a development center in Brazil, India, or China. The manage-
ment and control systems in place in such situations may be merely local
variations of the central corporate systems.
If the majority of the responsibility for delivery shifts to an outside
party, then the work has been outsourced. It does not matter that the
supervision is retained, because the customer must always maintain a
certain amount of supervision and coordination. There is an important
point to consider about outsourcing. When something is outsourced, there
is a shift from a
structure. When resources
are internal — employees or contractors — work gets done through a
command structure: workers are part of a command hierarchy and know
it. When work is outsourced, getting the same work done involves going
through a contractual relationship between two businesses. This contrac-
tual nature of the relationship may be hidden from day-to-day transactions
but it exists and can be invoked. However obliging the vendor might be
— he works within the scope of a contract. This can make getting things
command
structure to a
contract
