/ OUTSOURCING & OFFSHORING

Outsourcing Quirks, Client & Supplier Capabilities

If you were asked to go through a process of formal training in a new job where the task of that training is to change how you speak, how you present, to give you new mannerisms, would you think it odd or something perfectly normal?

This week in class we talked about the cartoon depiction of outsourcing and the caricatures within it that the general public might apply to the idea. As part of this the topic of Mother Tongue Influence arose whereby employees of offshore locations go through training to make themselves seem like they are from within the country that a person may be calling them is from. At first I found the concept to be a little bit too far but then the great point was raised that we naturally do this ourselves too. For example if I am on a call collaborating with people based in America I change the way I talk to be more understandable and of course I take care not to swear too much.

To gain an understanding of other cartoonish imprints of outsourcing that exist we watched a small snippet of the 2006 film Outsourced. In it the manager responsible for a team within a call centre in America is told that all the jobs are being moved offshore to India. The savings proposed are said to be 8 people in India for the price of 1 person in America, the move to offshore is presented as being an easy move for the company to be more efficient. Yet within the scene a few hints are given that this may not be the case, the manager brings up the point that it will be unpatriotic and customers won’t be happy. This is interesting as we can see today in public discourse and the media there is a growing interest in knowing where products and services come from and whether they might be better if offered locally.

Jack Welch’s 70:70:70 rule was mentioned, which I found interesting. This was proposed before outsourcing really existed and he said that 70% of the work a companies does can be done by someone else, 70% of that can be outsourced and 70% of that can be done in India. It is an interesting rule and one that I feel is at least somewhat accurate from my time working with large multinational corporations. Much of the back office stuff like human resources and IT support in two large companies I worked from came entirely from outside the company and many of my support tickets were handled by teams in India.

Crowdsourcing as a form of outsourcing was also discussed. Interestingly as part of my time in HPE we quite successfully used crowdsourcing to build an internal social platform on top of SalesForce. We used the TopCoder site to ask the crowd to build small modular pieces of the system that plugged into each other. Starting out with simpler pieces like connectors to LinkedIn profiles we built up an understanding that we really needed to have the skills and knowledge to be able to describe what we wanted and assess the quality we were presented with. The better we got at this the more successful the crowdsourcing projects became, it was a valid lesson in ensuring that you retain skills and do not become completely reliant on third parties for completion of your work.

The follow the sun approach to outsourcing/offshoring was also mentioned. This is where teams are located in timezones across the world so that work on a project or projects can be implemented 24 hours a day. As one teams day ends they hand their work off to the next and so on, it’s a constantly cycle of work. Again this is something that I have experience of as we tried to implement it at HPE on a trial basis. It ended up being a failure, mainly because it requires extreme capabilities in organisation, communication and process. Without excellent discipline, skills and ability the need to hand over and organise/adapt to an ever changing body of work daily the overhead was simply too much to bare. From the experience I wonder if anyone successfully implementing it are really gaining enough benefit from it to make this worthwhile. In addition this approach will amplify the traditional issues of outsourcing such as different world cultures, languages, intellectual property concerns and communication problems.

We rounded out the class going through the 12 supplier capabilities that need to be assessed when choosing an outsourcing supplier and the 9 capabilities a client should have. I’m not going to go through them but one of the most interesting things that resonated with me is the importance of ensuring that the core of your business retains skills and knowledge in the areas that you are outsourcing. Without retaining these skills you become completely reliant on third parties where you can’t even assess the quality of the work you are paying for and you are essentially just a consumer buying a product or service and no longer really outsourcing. Finally another interesting point raised was that while it might seem like non core areas or areas of your business that are easily repeated are good for outsourcing always be willing to turn this on it’s head and question whether something that doesn’t seem like a core capability might actually be something too important to the company to outsource.

donalrafferty

Donal Rafferty

Forever learning, Software Engineer, CoderDojo mentor, Smurfit Business School student, Photographer

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