When I first started working in technology in the 90s, it was a time of outsourcing lots of work overseas. Many large companies followed the wave of manufacturing in the 70s and 80s by many companies, including lots of semi-conductor manufacturers. I watched as a number of jobs moved overseas, though fortunately not mine.
In the early 2000s, I worked at a company as a manager, where I was involved in some of the discussions about outsourcing a lot of our IT operations to another company. It was a scary time for my friends, as the move would have left a lot of them looking for work. The CIO tried to say that many would get jobs with the outsourcing supplier, but couldn’t say how many.
I commented in a meeting that it would have to be less than 100% of people for there to be any profit. That statement ensured I needed to look for a new position, which I happily did. The company didn’t outsource at that point, but being involved in the discussions helped me realize how different management and workers often view the business of IT.
There was an article on when to outsource, which talks about the benefits and drawbacks. For most of the benefits, the reasons why you do this are very similar to why you might move infrastructure to the cloud. There is speed and flexibility, as well as simpler internal operations, when another organization handles those functions. The downsides are that your organization needs to manage another, and you might not have the control you desire.
The same thing you could say about the cloud.
The costs could be lower, with outsourcing or the cloud, if you can reduce unnecessary resources. That can be hard to do internally, especially as you hire staff. Each additional person might be necessary in the short term, but if when they are no longer producing a positive ROI, it can be hard to get rid of them. Consequently, with an outsourced company, often contracts dictate the staffing levels, and those contracts aren’t amended or renegotiated often. That could leave you with lacking services you need or paying for those you don’t.
I don’t know that it’s easy to decide when to outsource. My view has often been to keep some level of in-house staff, but augment them with some sort of managed service provider that can provide additional resources when you get busy. Whether this is a DBA service, like https://dallasdbas.com/, or a development effort, like Crafting Bytes, adding staff in limited quantities is often the best way to move forward.
These smaller groups also provide opportunities for some of you that might want to find a different type of employment arrangement. Usually more flexibility, a warm, friendly atmosphere, and the chance to grow with a small business.
Outsourcing might sound like a bad idea to many corporate employees, but it does provide opportunities for you. Keep working on your skills, network with others, showcase some knowledge with a blog/article/speaking slot, and you might hedge your bets in the event your employer makes a decision about outsourcing that doesn’t work for you.
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Another downside to outsourcing is (at least un my experience) is low quality workers. Bare in mind it was 20 years ago when I dealt with this myself. Like many companies at the time our executives were lured into outsourcing to India because of the promised savings. They didn’t hesitate to outsource nor did they bother to investigate to see the downsides of outsourcing. At the time there was already negative feedback online about peoples experiences with outsourcing (called offshoring at the time). At the executive level they were all bragging about how much money they would save the company and how smart they were for doing this while those of us at the bottom who had to deal the results of their choices found out that outsourcing was a huge and eventually a costly mistake. We dealt only with companies based in India for outsourcing so this may not be the same for outsourcing to companies in other nations. My former employer outsourced most of our tech support and some of the dev work. By the time the contract was up I heard we ended up spending more money than we supposedly were going to save and the satisfaction of our employees with our tech support had dropped drastically. Before the contract was over we ended up hiring a number of people to handle the tech support stuff that our outsourced vendor could not which was just about anything that wasn’t a simple well documented issue. With the development stuff that was outsourced often the code was sloppy, not properly documented and when it came to SQL it was easy to see they used some kind of query building tool so none of the queries were optimized/tuned and I ended up have to clean up a lot of what they did.
I believe offshoring, the kind that was popular in the periods you speak of was a HUGE and costly mistake from causing an unnecessary increase in unemployment to companies spending more in the long run to deal with the problems of outsourcing. Many companies fell for outsourcing because far too often the executives could only see the potential savings that offshoring promised. Like a customer suckered by a good sales person they bought into it without bothering to check into it.
Today outsourcing makes sense but only for some things (ie using Azure when you’re a small business without the payroll for a proper DBA and IT people) and only when the people you are outsourcing to are proven competent. Additionally if it’s going to be with a company outside the US they have to work on the language/cultural barrier that I also found to often be a problem when we outsourced. I will say that people from India are some of the nicest and most polite people I’ve ever met. It’s just that, at least in our experience, when it comes to IT/Tech they aren’t very good when you get past the basics. Maybe that’s changed since then, I don’t know for no company I’ve worked for since has outsourced to a company in another nation. My current employer outsourced or IT (the guys who would handle servers, server racks, ect) and that’s worked out fine but it’s also with a local company with some very skilled employees. In fact one of the employees is an ex-employee of my current employer and he’s highly skilled and intelligent.
Steve – FYI. I posted a comment/feedback earlier and was taken to the WordPress login where I did successfully log in but when I checked back on your article 30 mins later it does not show yet when I tried to post it again it said duplicate post but there are not posts showing on teh article. No idea what’s going just wanted to let you know.
I assume you meant the FW article. Responded to that
No I meant this one on Outsourcing and several hours later it still tells me it’s a dup if I try to post it again.