What Can Save Technology Outsourcing?

*This article is reprinted in full from the WeChat official account "Plain Talk on IT".*

Yesterday I chatted with an APS consultant, who remarked that outsourced projects truly wreck quality, wreck reputations, and wreck face! He ended up going deep into the project himself to bring it home, practically redoing the whole thing from start to finish. And that already makes him a scrupulously conscientious vendor; were it many another company, the choice would be either "muddle through the legacy mess and rebrand down the road," or "run the cost math and simply abandon the wreck," or "lower the client's expectations, deliver a low-scoring project, and forgo the acceptance payment"...

Meanwhile, a Kingdee consultant told me they outsource too: they have long been handing projects to a full-time consultant at Inspur, and, strangely enough, the results have been remarkably good. Risk control, project management, delivery schedules, scope boundaries—all managed exceptionally well...

So here is the question: outsourcing is common across the software industry, so why do some outsourced projects fail miserably while others come off even more solid than the in-house projects of the company doing the outsourcing? One answer: outsourcing to companies has a high failure rate; outsourcing to individuals has a high success rate. Let that sink in—savor it, slowly. The heart of the phenomenon: outsourcing to companies watches the profit; outsourcing to individuals guards the face!

I. The difference between outsourcing to companies and outsourcing to individuals

• Outsourcing to companies is a saturated vendor handing work to an underloaded team—or to a team that exists purely to take outsourced work. And it takes no great brains to see what a persistently underloaded pipeline means, or what a team that lives on outsourced work is really capable of. To put it bluntly: outfits that survive on the labor-rate spread botching deliveries right and left is only normal.

• Outsourcing to individuals is a saturated vendor handing incremental projects to capable individuals. The process always carries an element of referral—and where there is referral, there is screening. Hardly ever does "any warm body will do, outsource it to them" happen; the takers are usually people who have done well in their field and can bring a project to a clean finish. These consultants run their day jobs with room to spare—spare capability, spare working hours, and, above all, the spare freedom their companies grant them—which gives them a natural head start for taking on outsourced work. And such consultants, viewed from any angle, prize their personal industry reputation and their person-to-company commitments. Hence the high odds of success.

II. Why does a consultant working full-time at Inspur and taking Kingdee work on the side deliver the side projects better than the day job?

• "The chosen few": picking an individual is easier than picking a group, and an individual's strengths stand out sharply—so a moonlighting outsourced consultant is, at the genetic level, among the elite of the industry;

• "Money and face": side work is usually tied straight to personal income—the quality of the delivered project bears directly on the individual's earnings and reputation;

• "For freedom, all else can be cast aside": autonomy of project choice. Taking side work, consultants can choose the projects they are good at and interested in, and that freedom of choice makes them more invested and more efficient in execution;

• "No fortune buys 'I want to'": working side projects, consultants are free to choose when and where they work—a flexibility that lets them operate at their best and deliver or develop at higher quality;

• "The fundamental difference between working for someone else and striving for yourself": in a full-time job you can slack off, a little delay is no great matter, and blame is easily shifted onto "team problems"; an outsourced project, by contrast, binds goals and input-output squarely to you, and whether it goes well or badly lands directly on your own face.

A few parting words:

Our company has taken on plenty of outsourced projects from big-name firms, and the pattern in a nutshell: thin pay, heavy workload, slow payment collection. If you care about face, you must deliver quality—otherwise it is all too easy to walk away. As it happens, our boss is a man who cares about face: he runs B2B outsourcing engagements at the quality of work done for oneself, while pocketing the meager margins of the bottom of the food chain. And at the same time, we firmly refuse to outsource our own projects to any third party—no matter how hard you discipline your own child, blood remains thicker than water.

To prime contractors: "professional outsourcing vendors" are often anything but professional—choose with caution;

To prime contractors: outstanding individual outsourcing consultants are usually pretty good—select with care;

To client enterprises: when the people are right, the work will not be far behind—never mind whether it is outsourced;

To client enterprises: when the people are wrong, the problems will come in waves—outsourced or not, you will demand a replacement. Always remember: troublemakers mostly come from the backwaters!