Post #252,594
4/19/06 11:07:58 AM
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No they aren't. They are oversimplifications
They ignore the simple fact that an outsource provider can provide efficiencies not available to the host company. It is NOT like for like. It is NOT a necessary fact that 100 people in a client would be replaced with 100 people in an outsource...even if the host company is operating at 100% efficiency. These efficiencies are based on scale, scale that the smaller host company can NEVER acheive alone. You assume that the level necessary to offset the "added management" offset this, which is disproved by the savings numbers given in the article.
So, your "logical facts" are unsupported by the "actual numbers".
And the "client company" dictates the structure of the outsource. And those outsourced workers must satisfy the client or they will go away. So while you may have a point in saying that they must serve 2 masters, it is NOT a logical conclusion that the goals of those 2 masters are necessarily not aligned.
The observed facts and realities, at least those referenced in the article, disagree with your obvious logical truths. These deals are providing financial savings (an obvious and aligned goal of both parties). It has not been determined and cannot whether those companies receive increased or decreased levels of service. In my personal experience, I see better service from the outsource provider that I use now compared to the inhouse service I received at both my prior employers. Another point that seems to be contrary to your logical conclusions.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #252,602
4/19/06 11:29:51 AM
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Straw men marching?
"These efficiencies are based on scale, scale that the smaller host company can NEVER acheive alone."
So hiring a hundred people is cheaper per person than hiring 5? For the same experience? You get volume discounts on human beings (from the manufacturer maybe)? Individual salaries aren't based on, well, individuals?
Stuff and nonsense. If you disagree, and can find volume discounts on humans, I want proof. Evidence.
And - the savings numbers? I never said that it is always wrong - just that the companies it makes sense for are already sick and/or top-heavy. Remember? A healthy company would have no need of outsourced resources, save temorarily, in times of stress. Or if they were too small.
And your experience would seem to contradict mine directly. Of course, I have seen it from both sides as well - as you know. You know my opinion is long standing. Remember my laughter about being part of parasitic organizations?
Save that you admit you have worked for 'sick' companies.
Imric's Tips for Living
- Paranoia Is a Survival Trait
- Pessimists are never disappointed - but sometimes, if they are very lucky, they can be pleasantly surprised...
- Even though everyone is out to get you, it doesn't matter unless you let them win.
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Nothing is as simple as it seems in the beginning,
As hopeless as it seems in the middle,
Or as finished as it seems in the end.
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Post #252,606
4/19/06 12:30:16 PM
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You are off your rocker
IT is NOT PEOPLE. Its a corporate service that has deliverables to its business partners. Efficiency is measured on how many people AND OTHER RELATED RESOURCES it takes to meet those deliverables. (period).
Noone, not even me, is talking about 1 for 1 personnel costs.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #252,617
4/19/06 1:03:08 PM
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And what delivers that service? Robots?
Not yet.
Who handles support problems?
Who takes requirements and turns them into programs? Reports? Deliverables of any kind?
Who administers the systems?
Oh. RESOURCES. Not PEOPLE.
Sorry. My bad.
Imric's Tips for Living
- Paranoia Is a Survival Trait
- Pessimists are never disappointed - but sometimes, if they are very lucky, they can be pleasantly surprised...
- Even though everyone is out to get you, it doesn't matter unless you let them win.
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Nothing is as simple as it seems in the beginning,
As hopeless as it seems in the middle,
Or as finished as it seems in the end.
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Post #252,634
4/19/06 3:09:46 PM
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Maybe
People manage resources. People are part of the entire set of resources. They are not all of the resources. Others are servers, pcs, software (both owned and licensed), infrastructure, documents, processes, etc.
But you know this.
When I ask for a daily sales run, I am not handed the programmer with the information printed on his forehead...though sometimes I may wish that he had been sent through the impact printer :-) How I get this is irrelevent to me. Who runs it is irrelevent to me. What server, database, OS, reporting package is used is irrelevent to me.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #252,636
4/19/06 3:25:31 PM
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As long as you get it in a timely fashion,
With accurate data, and for a decent price. No argument. You shouldn't have to care.
That doesn't mean that the means to those goals is unimportant. Or an interchangeable commodity. Or that it might not be best not to keep IT processes and resources in house, and in the hands of the company. It just means that you don't need to know, personally.
Imric's Tips for Living
- Paranoia Is a Survival Trait
- Pessimists are never disappointed - but sometimes, if they are very lucky, they can be pleasantly surprised...
- Even though everyone is out to get you, it doesn't matter unless you let them win.
|
Nothing is as simple as it seems in the beginning,
As hopeless as it seems in the middle,
Or as finished as it seems in the end.
|
|
Post #252,638
4/19/06 3:44:17 PM
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Ah, we've taken the first step, grasshopper.
You're close. The department that is IT is measured in cost to provide those deliverables that the business partners expect.
There is no other value that can be quantified. Dollars for services rendered.
So while you have raised valid concerns about what may happen in an outsource (loss of control, mismanagement, intellectual capital loss, misaligned goals)...the true end is this...
If an outsource can deliver that report to me more cost effectively than an insource...then you have no argument. And this article validates that in the engagements they studied, you have no argument.
You may consider this "short-sighted". Unfortunately for you, this is also how it is in the real world. Its not a pendulum. It will not swing back, so don't wait for it.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #252,641
4/19/06 4:52:00 PM
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Cost <> price.
The fact that it will not fit easily into an Excel spreadsheet does NOT change that fact. Businesses that indulge in outsourcing based soley on a overly-simplistic bottom line of a spreadsheet will end up incurring costs that will hurt them competitvely.
And it WILL swing back, when delivery dates are missed, dollars are spent on additional resources to compensate, infrastructure is mismanaged and not fixed in a timely fasion, when the agendas of the outsourcers are foisted off on the clients, etc - management will get tired of it. After going through a few different outsource providers, and dabbling in offshoring, they'll get it. This madness may take a long time to play out, as people are rarely willing to admit mistakes. It will happen, though. (Again, except in companies that have fundamental problems or resource/budget constraints - those that NEED to 'outsource a kidney via dialysis')
Imric's Tips for Living
- Paranoia Is a Survival Trait
- Pessimists are never disappointed - but sometimes, if they are very lucky, they can be pleasantly surprised...
- Even though everyone is out to get you, it doesn't matter unless you let them win.
|
Nothing is as simple as it seems in the beginning,
As hopeless as it seems in the middle,
Or as finished as it seems in the end.
|
|
Post #252,649
4/19/06 6:03:32 PM
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I have a hard time agreeing with any of this
as long as there are companies that continue to do this and put themselves in a competitive cost position amongst their peer companies. The rest of your rant is assumption you treat as given (missed deadlines, reduced service, additional resources et al)
If industry benchmark says company X spends 2.25% on IT and via an outsource company Y reduces that number to 1.75%, then they have, in that area, given themselves an extra .5% margin which they can use to price their services/wares at more competitive offerings to their customers...or simply to earn more profit.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #252,678
4/19/06 10:43:42 PM
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So dollars are all. The spreadsheet is king.
YOUR assertion.
Outsource everything business depends on then. Everything is a commodity, interchangable, right?
The price you pay is always on the spreadsheet, the number of employees used = productivity.
After all if outsourced employees 'save' you money by charging 1.75% instead of 2.25%, it must be just as effective, as flexible, and as aligned with your business goals as employees you hire yourself, given that salary levels are the same, and that an outsourcing company has additional overhead (additional management).
Right. Whatever.
Imric's Tips for Living
- Paranoia Is a Survival Trait
- Pessimists are never disappointed - but sometimes, if they are very lucky, they can be pleasantly surprised...
- Even though everyone is out to get you, it doesn't matter unless you let them win.
|
Nothing is as simple as it seems in the beginning,
As hopeless as it seems in the middle,
Or as finished as it seems in the end.
|
|
Post #252,700
4/20/06 12:44:05 AM
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Not everything.
But good portions of IT are. And in those cases, like it or not, the spreadsheet does become king (because thats what management and the shareholders look at)
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #252,724
4/20/06 7:09:38 AM
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roundandroundandroundandround
Imric's Tips for Living
- Paranoia Is a Survival Trait
- Pessimists are never disappointed - but sometimes, if they are very lucky, they can be pleasantly surprised...
- Even though everyone is out to get you, it doesn't matter unless you let them win.
|
Nothing is as simple as it seems in the beginning,
As hopeless as it seems in the middle,
Or as finished as it seems in the end.
|
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