Unbounded Outsourcing

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I’m standing in the hallway of one of our client’s IT departments.  It could be anywhere.  To my right are spacious offices with floor to ceiling windows looking out into the city.  But no one is looking out the windows.  All of the offices are empty . . . they are all in meetings.
To my left are cubes full of people . . . sometimes two or even three people in a cube.  They are full . . . they are all working.
The offices are for managers, directors and VPs.  The cubes are ostensibly for the lower level employees, but they are actually full of a wide range of consultants, contractors and independents.
This is the state of IT in most organizations today.  Most of the full time employees left in IT organizations are those that manage the vendors, consultants and contractors.  Most of the people who do the coding, answer the help desk, reboot servers, and even train users are no longer employees of the company.  They work for someone else and just happen to be temporarily stationed at this client, on this project.
At 10:00, the doors to the conference rooms open and noise and management staff spill into the hallway.  For about 5 minutes, the hallway is full of life (and tension).  Managers and directors run into their offices to check an email or find a document or find the location of their next meeting and then they shuffle back down the hall. The conference room doors close.  It is quiet again.  The offices are empty again and the work keeps getting done . . . by people who don’t work for the company.
Clearly, most companies have decided that technology is not strategic to them . . . it is more important to get salary costs down than it is to invest in innovation and creativity.  And yet, the reason I am here, standing in this now-quiet hallway is that this company can’t seem to do anything creative with technology anymore.  Small competitors in their industry are killing them in the market.  This company’s revenues have stagnated, and the little guys are creating new products that are cutting into margins of products that were once very profitable.
I can’t help but wonder if the little startups have outsourced their development to Accenture, their help desk to IBM, and their infrastructure to Infosys.  Is it any wonder that a company staffed primarily by managers and directors that move work around from vendor to vendor would start to fall behind on innovation in their industry?  Is it really a good idea to have the majority of your technology staff employed by other companies?  Have these companies really thought through the implications?

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