the outsourcing reality
Filed in archive Global Economy on March 8, 2004
This article reflects some of the new viewpoints the WSJ added to the outsourcing discussion last week. It essentially reported about the wins and flaws of company close to bankruptcy with their outsourcing facilities. Valicert also made the classic mistakes:
- it tried to outsource product development as part of the programming, but as programmers in India have a very different general education it never worked out
- the assigned complete product development instead or small tasks instead of assigning projects something most Indian IT managers and developers have gathered experience with
- it underestimated the time zone issues
- they greatly underestimated the quality management issues
However Valicert had the breadth to stay committed and eventually avoid bankruptcy. After a takeover it now has developers in US, Bulgaria and India and it seems to work fine.
If you can manage to get access to the WSJ online edition search for 'Valicert' and it will help avoid mistakes...
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Tags: outsourcing reality entrepreneurship technology 2003 outsourcing+reality venture+capital brothers+ne
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Response from:
Thomas Tunstall
(03/23/06 8:08am)
Outsourcing can be a great solution, but it must be managed. Managers and executives will have to adopt new styles and mindsets to successfully manage outsourced services because those same styles will also be used to manage in-house activities very soon. A focus on measurement, performance and consequences will be key. Old school management idiosyncrasies will go out the window.
Response from:
TJ
(03/23/06 5:28pm)
Thomas,
thanks that is very well said. However one thing is setting performance targets and watching, it is another thing to put them in reality. For fast growing companies (with frequent changes in their hierachy) this can be a formidable challenge.
What exacttly do you have in mind how it should work?
TJ
thanks that is very well said. However one thing is setting performance targets and watching, it is another thing to put them in reality. For fast growing companies (with frequent changes in their hierachy) this can be a formidable challenge.
What exacttly do you have in mind how it should work?
TJ
Response from:
Thomas Tunstall
(03/24/06 5:49am)
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With regard to targets and metrics, fast growing companies should start where they can. Some things that are changing rapidly defy definition. Roughly Right should be the mantra at that stage - it is still far better than no measurement at all. Over time, patterns and definable outputs will emerge. Organizations can steadily refine the measurement process. The tendency of management is to be at one extreme or the other. Either no measurements, or overly precise ones. In the early stages of product or service development, a false sense of precision is worse than useless.
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