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US Government IT Outsourcing Is Poorly Managed (cio.com)
itwbennett writes: The U.S. government is spending way more than it has to on IT outsourcing. That's the finding of a report released in September by the Government Accountability Office that studied IT services outsourcing at three military branches within the Department of Defense, along with the Department of Homeland Security and the National Aeronautics and Space Administration. According to the report, while efforts to better manage their IT outsourcing had improved, most of these agencies' IT spending "continues to be obligated through hundreds of potentially duplicative contracts that diminish the government's buying power."
with Edward Snowden.
You don't have to hate or like the man to know they made a colossal mistake, giving a job away with a high level of access to a contractor.
>> U.S. government is spending way more than it has to on IT outsourcing.
I thought this was by design.
Never thought I'd use this construct in a post, but...
All IT outsourcing is poorly managed. FTFY
The only difference between government and private sector is public scrutiny. I know lots of state IT workers (from the university system) and the universal refrain is that they don't even have budgets for the basics. This is a big departure from the right wing meme of government being awash in tax dollars and lavishly spending, and these aren't the stereotypical lazy worker types either. I think that a lot of the reality is that the money goes to outsourcing giants like HP, IBM, Accenture, etc. and it's wasted in the inefficiencies that this brings to light. I've been in lots of outsourced IT departments and do work for outsourcers. The problem with outsourcing is this -- the company doing the outsourcing is paying $X to maintain their own environment. To win the contract, the outsourcer has to come in at $X - $Y for the bid to be low enough to accept. (X - Y) has to be greater than their cost to make $Z off the deal, where $Z is positive margin. The business model of an outsourcer, therefore, is:
- Provide the lowest/cheapest level of service possible to prevent the customer from cancelling the contract.
- Offshore everything that doesn't require in-country staff.
- Negotiate an open ended contract where almost nothing is spelled out, and all changes are billed on a time and materials basis.
- Use this T&M framework to pump up profits by adding chargeable change orders for everything possible.
- Bury the customer in endless levels of process, in the name of ITIL, service delivery excellence or whatever. This justifies a whole raft of change managers, project managers and analysts to write the documentation required for something that was previously done internally with much less effort.
- Better yet, force the customer to adapt your Standard Operational Framework or whatever the outsourcer calls it. This means the same level of craziness, but you get to reuse processes across all your customers.
- Slowly bleed out the on-site IT staff who knew anything. This makes it extremely difficult for the company to decide to insource again, or move to another vendor. After a long contract, they're essentially helpless without the vendor because anyone who knows anything doesn't work for the company anymore.
Now, take that model and apply it to something as complex as a state or federal agency. Make all the records transparent, and wait for the media to run sensational stories about 'Your Tax Dollars are Being Wasted by Big Government." Private sector businesses waste tons of money on outsourcing too, but it's buried in all the accounting sleight of hand and certainly not out in the open for inspection.