Contractors Take Up the Slack
When IT Departments Are Overloaded
When work simply has to get done and IT employees are overloaded, one solution is to outsource some of the work for a new project. Contractors have their limitations -- it may not be appropriate to outsource project management, and they won't have a detailed knowledge of how a particular company functions or what its priorities are. But working with contractors does give many strapped IT departments a flexible workforce when projects pile up. "I've worked with a lot of companies who use the rule that one-third of IT project work is done in-house, and two-thirds is outsourced," reports Bruce Myers, managing director at AlixPartners.
For Mazda's North American operations, relying on IT contractors is a way of life, according to CIO Jim DiMarzio. This is partly because the auto industry in general strives to keep full-time head counts low, but using contractors also gives the IT department, which has 42 full-time employees, the ability to shrink and expand at will, says DiMarzio, noting that while his Hiroshima-based Mazda Motor Corp. is a $21 billion global business, the automaker's U.S. operation is relatively small.
"Because we knew we were head-count-constrained, we put together a strategy where most of our full-time employees are analysts and project managers," he says. "We want our staff to be the people who could run this place. We can always go find programmers when we need them."
On most projects, Mazda IT employees serve as lead analysts and subject-matter experts, while contractors do the actual coding. "While they're off doing the coding, our staff will be working on other projects. We try to prioritize so that there's a focus on a primary project and there's always a secondary project they can work on at the same time."
But when crunch times really hit, such as during model year changes or the beginning of the fiscal year, Mazda can increase contractor participation. "If we find we are out of good systems analysts, we'll take one of the smaller projects, package it up and have one of the vendors do it from soup to nuts," DiMarzio says.
When that happens, "we insist that there be fixed-price bids on those projects," he adds. "That helps make sure they stay within their time frames and pay attention to the projects. It's not a never-ending supply of money coming their way."
Mazda also gets the most benefit from its contractors by having one or two representatives of each service provider on-site, so they can get to know the company. That's important, because Mazda has its own methodology for tech projects and insists that contractors follow it.
Some contractors have become virtual employees, working on-site on an ongoing basis. "There are enough projects that we always keep them fully occupied," DiMarzio says. "We want to keep them on our account rather than someone else's account." And when IT is ready to hire someone full time, they're ready and usually willing, says DiMarzio, adding "I've converted some contractors to employees."
-- Minda Zetlin