I know I’ve commented on offshoring before, but I was talking to a friend last night, and he mentioned that his department, which maintained a suite of products for a very large software vendor, was gong to be re-organized. The new boss was the fellow tasked with offshoring. [cue jaws theme]
On a related note, I read this article by Joel On Software about Not Invented Here syndrome. In the article, he makes very good points about giving up control of vital business functions. Actually, Joel puts it very succinctly: “If it’s a core business function — do it yourself, no matter what.”
In some sense, that’s what you do when you buy software off the shelf. You trade control for cost savings. I know that in several cases at a former company, we built software on top of a vendor’s platform, but what we were building was so focused that we ended up twisting the platform all out of shape. I think it would have been better to focus the energy, money and time that went to learning and reshaping the platform into understanding the business domain better and building more features on a custom platform.
In general, giving up control of vital business functions is a bad idea. So, offshoring (or outsourcing) customer service is a good idea if customer service isn’t a vital business function (right!). And vice versa.
The question then becomes, what’s a core business function? Ask that question of any large business, and depending on what department you’re in, you’ll get some different answers. I was talking to a guy a year ago who worked for a pipe construction company (you know, water pipes, beer pipes) in the accounting department. We touched on offshoring, and he mentioned that his company was planning to move all of their accounts payable to India, but, “thank you very much, we’ll keep the accounts receivable close to home.” Getting paid is probably vital business function for everybody.
So, where does this leave all of the folks in IT? Well, Bob Lewis writes a lot about IT as a force for business change, and that sounds like a vital business function to me. Where does this leave my friend in the maintenance department? I don’t know.
I don’t really have an opinion on offshoring (okay, that’s a lie. I think it’s bad to ship jobs overseas because it makes it that much harder for me to find a job… but from a capitalist point of view it certainly does make sense) but since I work at the business school at CU, I can contribute to this topic by mentioning that the Leeds School of Business in conjunction with the Mountain States Chapter of the AeA is hosting a symposium on offshoring in March. It’s not free, and I’m not going, but if you’re interested, more info is available at http://leeds.colorado.edu/offshoring/