Originally posted by Not So Wise
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Those initial savings are false saving in the long term, just like the cheap airlines in Mich's example.
Sure their initial price is a massive cut in what a contractor would cost (though not as much these days as it used to be unless you use really dodgy off shore suppliers) but then they quite literally nickel and dime you death
Place I am working at the moment really got into the outsourcing fad back in the last crash, to the point that there is no real in house development team anymore (except moi
), 99.9% of the stuff is outsourced and has been for a while. Now on virtually every system they have they have to go back to the suppliers for the slightest change and those suppliers are raking it in.
Common to see them charge in excess of £2000 for what I know would be about an hour or two worth of work (they of course always claim it is 20 times more work than it actually is), recently had one quote a PM £2500 to change label text on 5 items in a ASP.NET app…bloody fool was going to accept too until I sat him down and did the changes right in front of him in 3 mins flat
Outsourcing has it's place (mainly one off's that should not require lots of support where company really has no one internal with the necessary skills), but just like last crash majority of projects that are getting outsourced are the wrong type of project to do this with and only reason they are doing it is to save money in the short term, in the long term it will end up costing those companies a lot more than contractors, hell it will cost them even more than permies who spend 30% of the year doing nothing
Sure their initial price is a massive cut in what a contractor would cost (though not as much these days as it used to be unless you use really dodgy off shore suppliers) but then they quite literally nickel and dime you death
Place I am working at the moment really got into the outsourcing fad back in the last crash, to the point that there is no real in house development team anymore (except moi
), 99.9% of the stuff is outsourced and has been for a while. Now on virtually every system they have they have to go back to the suppliers for the slightest change and those suppliers are raking it in. Common to see them charge in excess of £2000 for what I know would be about an hour or two worth of work (they of course always claim it is 20 times more work than it actually is), recently had one quote a PM £2500 to change label text on 5 items in a ASP.NET app…bloody fool was going to accept too until I sat him down and did the changes right in front of him in 3 mins flat
Outsourcing has it's place (mainly one off's that should not require lots of support where company really has no one internal with the necessary skills), but just like last crash majority of projects that are getting outsourced are the wrong type of project to do this with and only reason they are doing it is to save money in the short term, in the long term it will end up costing those companies a lot more than contractors, hell it will cost them even more than permies who spend 30% of the year doing nothing
Back in the day when I used to advise multinationals on outsourcing for a living, I used to tell them never to outsource anything that would impact on their core business if they lost it. So menial tasks, etc, legacy mainframes being run down or replaced etc.
These days, managers only have a 12-36 month horizon and anything that comes to light after that is no longer their problem as they will be promoted or working elsewhere by then. Thats assuming its not one of the big consultancies doing the work on behalf of the board and permie managers dont get a look in.
IT is such a small part of outsourcing deals these days and if it is good or bad it does not make much difference.
As a for example, I recently went back to one of my previous clients to update some strategy documents as a favor to one of the guys there. The client, one of the largest global banking firms, used to run its customer helpdesk with 55 staff in the US, 17 in the UK and 22 in Singapore. A year or so ago, they outsourced the entire CHD to India where there are over 450 staff doing the same work and the supporting IT infrastructure is significantly shrunk in India as it is cheaper to hire bodies to fill the cracks and no need to develop any additional IT infrastructure. The outsourced service has been demonstrated to be 60% lower in costs over 6 reporting periods than the previous in house service desk. As I said in earlier posts, none of us contractors can match business benefits of this magnitude. This is just one example of why client co's don't need us any more.
PZZ
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