Lambasting Outsourcing

A while ago I speculated on what would happen if hedge funds ran outsourcing contracts. That post attracted a worthy comment – an essay in fact. Rather than leave it buried in the comments, I thought I’d raise its profile. It’s very Private Eye and whether you agree or disagree with the point of view, I expect it will raise a wry smile. I’ve edited it only slightly – to make it a little shorter (you can find the full post and comment at the link above):

CBI.com magazine interviews several prominent business leaders and government ministers, with a lie detector, a waterboard, a pair of pliers and a blowtorch, and asks the question, “Why do you outsource?”

————– Ivan Ornérée Surcha MP repsonds : ——————–

“Well it causes redistribution of wealth. If we outsource to a big company, we can have lots of secret deals where they open an office on the waste ground of an old ICI plant in the Middlesbrough slums, employing all the plebs who would vote us out if they were unemployed. It doesn’t matter, per se, that the project ever achieves anything or even works, the only important thing is that the government isn’t embarassed by the employment figures, and if the project happens to be a success it’s announced before a general election, and if a failure it’s announced after we’ve lost the general election. Speaking of elections, I must see my researcher this afternoon.

As a second point, if we didn’t outsource, who would employ us when we left office?

Obviously, we don’t explain it that way, we explain it in terms of garnering the support of the whole community, and so on, but the reality is that we can push all kinds of social responsibility onto a big company, and they’re given so much money for the job, I mean just look at the Child Support Agency, Microsoft Dynamics CRM, or even outlook, did all the things they needed but for just £500 Million we can bring the Northeast forward into the 20th century, that they can afford to employ all the care in the community types we would otherwise have to find secure accomodation for.

As well as this, once there’s one or two big companies handing the work, if we find say, a large amount of unemployment in a particular social group, say single mothers, we can create a new law or two to ensure they get a job. This technique doesn’t work for small companies. For instance, the right to jobsharing, combined with any type of box ticking legislation, say equal rights, means a big company such as EDS or someone, has to prove they don’t discriminate against the uncompetitive, and thus they have to employ diversities directors, and compliance staff. What else would a woman with a social studies degree from exeter do if we didn’t create a market for her to work in? She’d be working in McBurgerland, that’s what, and she’d vote us out I’ll tell you what, eh? This is government after all, we have to look after everybody, not just the capable.

——–Sir Withington Smythe, Head of Automata Systems, replies ———

“Why do we outsource? Well it’s quite simple really, we’ve got a whole stockmarket out there baying for instant profits, and my job depends on it. If I say to the analysts twice a year that we’ve setup a large IT project, everyone thinks “They’ve never done a big job before!!”, and they panic. Before you know it, the share price is down. If however, I say, we’re getting -Insert Very Famous Consultancy Here- to do the work, they think, “Well we don’t know anything about IT, but at least the CEO is prepared to admit he doesn’t either. I mean just look at Aunty Pat, complaining about it being difficult to deal with all those database thingies, it just goes to show you see, inability to understand goes right to the very top. Besides, noone will ever hear if PWCMPG screw it up, because they’ll settle out of court with a confidentiality agreement, and give me a job when I’ve left this place. There’s no end of people happy they’ve had a board room table to fall back on.”

“There’s a second problem, these IT people cost a hell of lot of money, and whilst I’ve no problem giving a six figure salary to old Billy Rothschild-Devere I fagged with at Harrow, but for some kid who is just out of school and grew up in an engineering yard, well they just won’t be able to return the favour will they? I mean they don’t even have a Hice in Gloucester do they? After all that’s how I got started on the floor, noone’s going to buy stock from a coalminer are they, but if they know my dad. The additional problem with these chaps is that they don’t want to move into management, they want to stay technical. As for all the people who have social skills that you’d like to promote, the problem with these chaps and chapesses is that they don’t have a ruddy clue about what happens inside a computer.”

“The final problem is that time has passed, and you’ve just got so many MBAs coming out of Harvard, Insead, LBS etc, that it’s not like the old days anymore. There used to be a couple of hundred MBAs, but now they’re like flies at polo match – and all of them want to cut costs, so they treat the staff like commodities. This was fine until the staff worked out how they were considered, so now everyone’s just trying to guard the old canal. This is compounded by the fact that every young management pup has to justify his existence by suggesting that we do something else. I mean, noone wants to say, “It works. It’s pretty good.” because if they do, why do we need them, eh?”

“Finally, there’s one good thing about outsourcing. It allows the business to change. All business needs change, it helps us cycle the staff, otherwise you get these care in the community types building up. I’m not saying they shouldn’t have a job, but I’d just rather they were employed somewhere else.”

“Of course the actual end decision to outsource has to be supported by some genuine business reasons, like cost. There’s a world of difference between cost and short term cost, just ask the Tessa or Seb, or Enron. Most businesses and most market analysts don’t want the real cost of IT on their bottom line.”