The Forgotten Side Of Outsourcing

Computerworld - If onshore and offshore outsourcing is the new wonder drug, "human factors" should be listed as both a benefit and a side effect. Human factors are one of the most important parts of any outsourcing effort, particularly when the outsourcer is located offshore. To proceed successfully, you should carefully consider the people issues from both sides: benefits and drawbacks.

Benefits

Outsourcing can supply your organization with highly specialized skills on a part-time basis. Most CIOs find it difficult to justify filling precious openings with staffers whose technical skills are required only intermittently.

Since IT is the outsourcer's primary focus, any staffers transferred to the outsourcer will have expanded career opportunities -- to develop highly specialized skills and broaden their experience across multiple industries.

Outsourcing also provides an opportunity to transfer some administrative costs and headaches to your outsourcer. You won't have to waste precious months "managing out" nonperforming staffers. And with fewer people to manage after outsourcing, your organization will require less time for human resources management and administration.

Side Effects

You can overoutsource and lose your delivery skills. Reckless outsourcing can strip your organization of the skills required to be effective. If you outsource everything, you'll also strip your organization of its ability to use leverage on and control the outsourcer.

The outsourcer's culture may not fit yours. One outsourcer introduced a group of hard-driving Northeasterners into a conflict-avoiding, consensus-oriented Midwestern company. Misunderstandings and hurt feelings were rampant, until the outsourcer's staffers were coached to soften their approach.

Outsourcing can cause fear and dysfunctional behavior in your remaining staff. Other departments may see IT being outsourced and worry that they may be next. (One textile firm, after outsourcing its IT department, found its fashion designers discussing the merits of moving to New York to avoid being outsourced.)

	Bart Perkins is managing partner at Leverage Partners Inc. in Louisville, Ky., which helps CIOs manage their IT suppliers. He was CIO at Tricon Global Restaurants Inc. and Dole Food Co. Contact him at BartPerkins@LeveragePartners.com.

Misunderstandings about outsourcing can generate bad publicity. One company's outsourcing plans were leaked to a state senator, who was told that the company was bringing in illegal aliens under false visas to replace U.S. citizens. The senator was prepared to take the issue to the statehouse, until the company cleared up the misunderstanding.

Before you outsource, put a comprehensive plan in place to deal with human factors. This is even more essential if you're going offshore.