Outsourcing Your Organization to Incompetence

Outsourcing is often a cost-effective way to meet organizational goals. However, when an organization can no longer answer fundamental technology questions with their own staff they have crossed the line to incompetence.

In recent years I have increasingly come across “Information Technology, (IT)” people that are not really “IT” people anymore, “engineers” that are “engineers” in title only and “project managers” that are not really “project managers.” 

There is nothing inherently wrong with this. It is often the result of balancing an organization given managerial structure and context. However, when this is an outcome of an outsourcing decision, the true price must be evaluated. My mantra that is repeated in every training class is

“There is no such thing as a free lunch and everything has a price... especially when it is not obvious.”

Part of the price of outsourcing can range from skills degradation to a total loss of internal skill sets and capability. This even applies to project management. Outsourcing has become so popular and widespread that sometimes organizations implement it without a strategic focus. They outsource without considering the long-term ramifications it has on internal staff development and capability.

When an organization can no longer answer fundamental technology questions (or project management questions) with its own staff, you have established a level of dependency on contractors that may be unhealthy. There is no issue if your contractors are candid, trustworthy and capable. However, 

Prudent risk management would be not to assume your contractor is 100% candid, trustworthy and capable.

There is significant risk that a contractor (possibly including the one that takes you and/or your boss to lunch) may not be candid, trustworthy, and capable, especially if there is schedule or cost pressure that may impact their bottom line. 

It is no different than taking your car to an automobile mechanic when you obviously know nothing about cars… a certain percentage of the time you will pay for unnecessary work or work that wasn’t done at a high-quality level or even work that wasn’t done at all… while getting service with a smile.

Internal knowledge matters!

A contributing factor to the failure of some medium to large projects is the lack of sufficient internal knowledge on the part of the organization that is outsourcing work to support the project.  

Many organizations can spend hundreds of thousands to hundreds of millions on a project but won’t spend a fraction of a fraction of a fraction of that amount developing personnel or even directly hiring personnel with specialized/high level skills to support the activity internally. In the short term these actions are viewed as “too costly” when probably they have the greatest return on investment of any course of action given what is at stake.

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Dr. James T. Brown, PMP, PE CSP, Author, The Handbook of Program Management, McGraw-Hill