Outsourcing Gone Bad - Another Reason to Consider Agile
IntelligentEnterprise.com has run a long InformationWeek article by Paul McDougall entitled: In Depth: When Outsourcing Goes Bad. In it, McDougall reports on the recent InformationWeek Research survey on the subject of IT Outsourcing.
50% of companies rate their outsourcing efforts a success, a third are neutral, and 17% - nearly one in six - call them disasters. For those in the latter category, primary reasons for dissatisfaction include:
- poor customer service, vendor responsiveness or flexibility (45%)
- hidden vendor costs
- insufficient up-front planning by our company
For those suddenly interested to hear more about Agile software development, a good place to start is the Articles Library of the Agile Alliance which is organized by topic.
"A new study has found that cheeseburgers contain 27% more fat than regular burgers. Perhaps it's time to consider Agile methods.."
am I wrong?
.w( the_mindstorm )p.
Re: Orthogonal concepts
Apparently, I didn't get that across :-)
You are right in saying that this item doesn't in any way address use of Agile *with* outsourcing.
Re: am I wrong?
Re: am I wrong?
I'm not sure we can compare these stats against the mentioned outsourcing stats, which don't indicate quality of deliverables or timeliness, only cost savings achieved.
In addition, Standish identified success criteria based on the study. I suspect that the absence of these factors would equally cripple outsourced and insourced projects.
Points / Success Criteria
19 / User Involvement
16 / Executive Management Support
15 / Clear Statement of Requirements
11 / Proper Planning
10 / Realistic Expectations
29 / other factors (see the site)
100 total point
Here are some recent stats: A new Gantthead.com article To Insource or Outsource IT notes:
In almost every conversation I have had with executives as to why they are pursuing outsourcing, the focus has been more on cost savings than on anything else. Unfortunately more times than not the results have been dismal as they fail to appreciate the complexities, intricacies and energies needed to manage the process.
Nonetheless, the same article goes on to say:
In a recent study on outsourcing, IBM claims that companies that engage in IT outsourcing have shown 11.8 percent higher growth in earnings, 9.9 percent lower expenses and 8.6 percent higher return on assets than their competition.
This suggests to me that (if quality doesn't suffer) it pays, but it's messy: worthwhile when the cost-cutting aspect far outweighs other considerations. But one wonders what the personal cost was for those doing the firefighting - which too often comes out of the home-life bottom-line, and doesn't show up in corporate accounting.
I suspect that for some industries it's more suitable, hence more beneficial, than for others.