12 Steps to Beat Your Service-Provider Addiction

eastbayted writes "It starts off simply enough: Your company signs on an outside firm to help you finish an important app dev project on deadline. But then they convince you they can be of service in getting other work done at your company, and you agree. Before you know it, your organization has become far too dependent on this team of outsiders on whom you're wasting a ton of money and perhaps not getting much in the way of a return. InfoWorld has devised a 12-step program 'that can help wean you off unhealthy dependencies on service providers, consultants, and outsourcers — without having to check into the Betty Ford Clinic or make a tearful confession on Oprah.'"

Comments

Re:I'm one such!

[Anonymous Coward]

Or ones that start off tasty, but slowly become rotten over time. And when you try to stop you realize you can't, because you've been eating crack-laced apples the whole time. That should sum up the experiences many have had with outsourcing: great at first, horrible later, but too hard to get away from because you're now too dependent on it.

Hey!!

[AnomalousTurd]

I work for one of these service providers. Reliance on IT outsourcing is pretty common these days for major companies. Even technology based companies. I feel in many cases that paradoxically, it is a way for the companies to get back in control of their IT which may otherwise have become a self-serving money-eating monster.

Incidentally I would think a large percentage of slashdot readers are in outsourcing.

EDS & CSC are gonna LOVE this /. article (not)

[Anonymous Coward]

South Australia seems to have an addiction to its EDS contract,
but there are more students studying IT, hopefully to take jobs
in SA Gov't, to help position itself in an EDS-free place, "any
day now"... ;-)

A EDS-story has been cirulating in recent years:

  The Adelaide Crows (Aussie Footy Team) needed a web site, &
  EDS (reportedly) won the contract, after submitting a bid
  which estimated it would take 4+ weeks and cost Au$ 32,000.

  In fact, the project took just 2 weeks... Too bad a local
  South Aussie web making business couldn't have been the
  winner, in this case.

(SA also has a "whole-of-gov't" contract with Microsoft,
that calls for penalties whenever a non-Microsoft server
is added to the gov't N/W in contract's scope, ie, for
the first time (replacing an -old- UNIX server by the
same -old- version of UNIX may not lead to a penalty).)

How do such contracts get written or won?

There are very few palms to be greased & a company like
EDS has a lot of "grease" to offer, or so we suppose...

Re:Understand why

[UKRevenant]

The reason they stay so long is often simply down to inertia. The "We've started so we'll finish." coupled nicely to the "Why did we pay them so much if we are not going to listen to them?".

I used to work for a company that was taken over by an asset stripping industrial conglomerate, to make sure they got the best return for their money they sent in consultants for every department. Sadly, in the engineering department we used lots of fancy computers running non-industry standard programs. So, when the consultant came to look he had no idea what the system actually was doing or what it was capable of. His recommendation was to shift to industry standards, including AutoCad, which the company did despite my best efforts. The company lost its competitive edge as soon as the standard software was put in. I had 2 of the existing suppliers (one the main application provider, the other the hardware/os support company) they both submitted very similar suggestions for the way forward. The application provider, obviously, had a vested interest. The support company had no vested interest as they expected to continue to provide support regardless of the direction chosen.

I presented my own findings and pointed out several flaws in the consultants report, I also presented the reports from the 2 other companies. The only thing I was asked about the reports was who had authorised the spend on the additional reports and when I said they had been provided for no charge, I was told the company had spent thousands on the consultant and for that reason would be going ahead with his suggestions. I resigned at that point.

In case you are interested, the consultants suggestions were implimented in full at great cost and since the old systems were decommissioned the productivity of the company has dropped, which has had the obvious outcome of reducing it in size to about 10% the size it was when I left.

On a plus note, the consultant made me move into a much more enjoyable and profitable job.

Outsourcing Done Wrong.......Sigh

[segedunum]

Many companies get outsourcing wrong, particularly in IT, because they have have managers who don't know how things work, they've never written a line of code or put in a server in their lives and don't seem to have a learning gene inside them. I work in a company who has a contract with a financial company for a major system, and honestly, I think we're the only ones who care sometimes. Of course we're the only ones who knows how the app works. We're certainly the only ones who seems to know what's going on, and if something happens even remotely related in the general area of our system we have all sorts of people in the company instantly hanging on to our apron strings and phoning us up. I suppose it's because many boring companies, like financial ones, just can't attract the right people who can think for themselves - hence they become even more dependant on outsourcers and consultants than they otherwise would be. When you see how many of these companies operate, you can see why.

This part of the article I always worry about:

You must roll out a major enterprise app on a tight deadline and you don't have the bodies to pull it off. So you borrow some money from next year's budget and hire a global services firm to help.

This never works - ever. Managers of IT projects who don't know much about IT seem to have this incredibly bizarre idea that IT people, programmers and analysts are all interchangeable. You can drop someone from a project two months away from the deadline, bring someone else in who knows nothing about what's going on and the new person will instantly hit the ground running. They also do it again, and again, and again and again. They also equate getting bodies on the project directly with getting it done faster. If something is late and obviously a complete mess it instantly becomes a resource problem. Not that I like calling 'people' 'resources'.

I've seen it time and again. Company gets an outsourcing company and consultants in to develop a system because they don't have the people or the expertise. Said company has no real idea what the requirements are in terms that they can get over to the consultants, they have no real idea exactly what they want these consultants to do and the whole thing becomes a mess with the outsourcing company, quite rightly, creaming off whatever money they can because of the ignorance and lack of clarity from the main company. The company then starts to bitch and whine about the 'leech' outsourcer and the relationship deteriorates. Rinse and repeat the process for the next outsourcing company.

The article can be summed up thus. Fire the useless people in your company and employ good people who can define requirements well, and consequently, can lay it on the line to outside consultants exactly what they want. The consultants will then actually be much happier, because they will know what it is they've got to do - something they probably haven't had much of ;-).

Re:Outsourcing Done Wrong.......Sigh

[swillden]

This never works - ever.

I disagree. I've seen it work. The reason it hardly ever works is because (a) managers wait too long before adding staff or (b) they don't add enough staff.

If you have a project that's running behind schedule and you want to add people to catch up, you first have to realize that the new people will be a huge drain on your existing staff's time. Very high-quality people will be less of a drain, and they'll get up to speed faster, but they'll also cost more, generally. Even the best will take time to educate, and they'll be a distraction in the meantime. You also have to realize that no matter how you go about bringing them on, not all of the people you bring in are going to be good.

So, if you want to add staff to a late project in order to finish it on time, you first have to plan on the fact that doubling your staff is going to halve the team's productivity for the first few weeks, and even after the 'ramping up' period is over, your team is not going to be twice as productuve as it was. Maybe 50% more productive. So you have to add far more new staff than would be predicted by looking at the tasks remaining to be done.

A good rule of thumb is to assume that each person you add will accomplish nothing useful during the first month of work, and will cut an existing team member's volume of useful work in half. After accounting for that productivity hit, look at the time and tasks remaining, and make sure you're adding 50-100% more new developers than the project plan says you need. Unless all of the new people you get are excellent, lean toward the higher end of that range. Finally, if the planning process shows you're going to end up with more people than discrete, separable tasks, just forget it.

My current project did this successfully. We had a very good, aggressive PM and a couple of excellent team leads who realized about three months before the deadline that the current team of six was inadequate, and that all reasonable analysis showed that they were going to miss the deadline by about two weeks. A naive manager would assume that since there was 12 man-weeks more work than time, and 12 weeks remaining, he needed to add one person to make up the difference. Our PM added six more, and all of them senior, experienced developers. It took two weeks to get the new people on board, slowing the project some because existing devs had to spend time with the interviewing process. Then it took a month before the new people were really productive, during which time they slowed progress further. Six weeks after the decision was made to add staff, the team was five weeks behind schedule (they had been two weeks behind, remember). But at that point we had ~66 man-weeks of work remaining, and 72 man-weeks of developer time available (12 people times six weeks). Even that wasn't quite enough, but with the addition of a few weekends (all billable hours, increasing costs further), we finished development a week ahead of schedule, and had that time for bug fixing and cleanup before user acceptance testing started.

I've seen it work in other cases as well. The key, though, is to add lots more staff than you think you need, make sure they're competent engineers and quick learners, and do it early. It's expensive, but it can work.

Re:Use strategic open sourcing

[Anonymous Coward]

Open source wouldn't help any in those situations. You can just as easily stipulate in the contract that they hand over all code to you and it be closed source, you would have to stipulate that the project is open source to get them to release it as well so the problem is bad contracts and employer expectations.

I could have consultants make code that is open sourced but I STILL have to train up my own staff (who is busy maintaining servers, help desk, other applications, etc) to be familiar. You get locked in because you can't spare your own people to work on the open source package. Unless that open source program has a following nobody else in the world will understand it either so it makes no difference, I would STILL have to train up somebody to take over maintaining it.

Why do people expect open source to be the perfect solution? I could make a program for a waste treatment plant open source, doesn't mean anybody will work on it or have any knowledge of what it does, it could be the buggiest POS ever made and unless people have an interest and look at it it may as well have been closed source for all the good it would do. At my company our software is so specialized for its task that open sourcing it would make no difference, anybody who we hire to work on it has to be trained in specifically on what tha heck it is doing

Re:EDS & CSC are gonna LOVE this /. article (n

[dubl-u]

How do such contracts get written or won? There are very few palms to be greased & a company like
EDS has a lot of "grease" to offer, or so we suppose...

It may not even be like that. Consider your average consumer, who is boldly manipulated by any marketing agency who can buy air time. Now consider what happens when you take the top people from that agency and put them in the room with an executive. It's like a pack of dogs on fresh meat.

A friend of a friend mine worked for a few years hot-shot company that was negotiating giant contracts with the California government. As the salesmen slipped thing after thing past, he felt an overwhelming urge to get up and move to the other side of the table because it was so unfair. Government bureaucrats had no defense against these sharks. Of course, he sat still until the urge passed. He had payments to make on his Porche, and you can't do that on a government salary...

Re:government consulting

[Marxist Hacker 42]

Some organizations are mainly management staff running pools of contractors (for example NASA). Is this the best use of Tax Payer Money?

Oregon Department of Transportation is begining to resemble that remark. Luckily we're trying not to in IT- and failing greatly, we had a 26% turnover when you include the consultants, for 2005.

Having said that- ODOT came under fire in the 1990s as the largest state agency. It's people who don't want to pay taxes who are driving this boondoggle, under the assumption that "Private Industry Can Always Do It Better", a mantra of small-government conservatives and libertarians that is a complete and utter myth to somebody like me who has worked both public and private sector. It's the stupidest thing imaginable- but I'm one of those contractors who was so valuable that I was brought in house for my third year with ODOT.