You've got to love that Gartner is covering their behinds now that it's clear that outsourcing vast amounts of work offshore has problems that can't be hidden...
Posted on 12/18/2004 8:55:35 PM PST by jb6
High-profile outsourcing failures are expected to be a feature of 2005 with rushed cost-cutting deals of the last few years coming back to bite some businesses, according to new research from Gartner.
Gartner's prediction comes on the back of its CIO Resolutions for 2005 study, which outlines changing trends that CIOs need to address to add value to the business and further their own careers.
Mark Raskino, analyst at Gartner, said: "We have seen a lot of people outsource quickly for cost cutting and we will see some of those fail. In 2005 we will see some accidents. We will see some clients insourcing and we are starting to see that already."
One major trend is a shift in focus in many businesses from cost-cutting across the organisation to a period of expansion and growth, both organic and through mergers and acquisitions.
But Raskino warned that CIOs should also have plans for alternative scenarios - including a worst case one - up their sleeve as the business environment is likely to change further over the next 12 months.
Elsewhere, Raskino said there will be a continuing move towards the good CIOs being more focused on business issues and not technology-specific issues and he advised IT leaders to spend at least 15 per cent of their time in the next year working on a business project completely unrelated to IT in order to broaden their skills and build credibility among other senior executives.
But this won't be an easy task with Gartner figures showing "considerably less than half" of CIOs have a business background, and just 20 per cent – a figure that has steadily dropped over the last few years – have a seat on the board as a trusted adviser to the CEO.
In terms of career advice, Gartner says CIOs should decide whether to be industry specific – and if so get some wider industry skills in that vertical – or the "interim manager" CIO who goes from business to business cleaning up messes and helping with change management projects.
Challenges over the next year include the ongoing issue of compliance, which continues to mop up discretionary IT budgets. Raskino said a building society CIO revealed to him recently that his discretionary budget for the next 18 months had been completely taken up by work to meet Financial Services Authority regulations.
But the overall message for CIOs is not to stand still and to embrace a phase that is likely to see many opportunities. CIOs should make a resolution to "move forward in 2005, don't repeat 2002", advised Gartner.
IT is without a doubt the worst organization for spray painting a turd white and calling it a marshmellow.
Of all the industries, IT has had to be the worst managed hands down. To many IT people are unsocial (I work in the industry and these types are a pain to work with on a team) and most of the managers have a business degree and have trouble programming HTML let alone knowing what the hell is really going on.
One of the reasons IT is so badly managed is they follow fashions. And a big reason they follow fashions is the top management listen to research companies like Gartner. Gartner, just last year, was advocating that companies ship everything not nailed down over to India.
All these fools looking for short cuts are constantly disappointed but they never get the point.
Hello my name is RHZKESKNSEONADOFBWEDFSLFSNOOSENFOSEF how may I help you Sahib???
We had an H1B tester. Guy spoke "english", wrote just like he spoke. I could never understand what the hell he was writting about. Talking to him was just as bad. Nice guy, never understood a damn thing he said/wrote. That save in per hour costs was offset by a waste of my hours and his hours and everyone elses hours.
You've got to love that Gartner is covering their behinds now that it's clear that outsourcing vast amounts of work offshore has problems that can't be hidden...
On one of the main channels tonight (I think it was on NBC news) there was a story of a woman who started a business they called 'rural insourcing'. She set up a tech jobs shop in Jonesboro Arkansas to compete with the outsourcing to India. The people at the computers seemed quite happy with their starting pay of about $20,000 a year.
Who knows, maybe if the jobs can continue to shift to areas where it costs less to live...more companies will look at the low cost labor in the USA.
Companies that realize they have made a major mistake are screwed. They have an inept outsourced team and they have fired their U.S. based employees. No fallback.
Companies that crap on their employees for the sake of improving the bottom line deserve the consequences of a failed outsourcing program. Their former employees owe them no allegiance.
There will be plenty of opportunities to cobble up new businesses in the U.S. to rescue failed outsourcing attempts. Just imagine the joy of digging into code written by people with a limited profiency in English, little or no experience in software engineering and a big ego after graduation with a CS degree.
Problem is, few people are willing to get a $30K degree, work like mad, staying in a computer lab till 3am 3 days a week just to earn less then a teacher or a Block Buster manager.
Nothing more should need to be said, especially amongst those who are aware of the expected climate change.
Many organizations get on this bandwagon, only to find out that the hidden costs and other problems outweigh the expected savings.
Some are only experimenting with it.
Way too much has been made of outsourcing. Far too much Lou Dobbs channeling.
The "coding wars" conducted in the mid-80s roped me into the process. "Peopleware" was the output. An excellent study in control of time, space, schedule and interruptions.
A fellow employee at PacBell made a bundle writing the Dilbert series. When I read his work, I could just about name the exact person who was the target of his parody.
I was once called to help another telecom company diagnose a serious problem with DNS and routers. The manager in charge of the effort was calling meetings with 30+ people on conference calls that droned on for 90 minutes. That was happening twice each week. He would extoll the virtues of achieving Six Sigma uptime. I had to point out that having 3 or 4 hour failures every other day was so far off from Six Sigma that he was just deluding himself. Finally, I excused myself from the daily meetings by asking him to tally the hourly compensation of each participant in his teleconference. It had not dawned on him that he was burning nearly $5,000 a week in useless conference calls.
The Marine Corps is covering his class costs at University of Phoenix now. Assuming he doesn't get a call to active duty next summer, he will be finishing a business management degree in January 2006. At that point he will be free to decide whether to wrap up his reserve service with the Marines and go 100% civilian employment, or seek a commission as an officer.
Schadenfreude!
And in the words of Captain Black, I am seriously going to enjoy watching them "eat their livers".
"Some" failures predicted, eh?
I still want to see a survey of all outsourced projects. What % were actually 'successful', when compared to the costs/output of having had the original people do the work.
To date, I don't know of a single 'success' story, out of about a dozen outsourcing attempts.
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