Parasitic Outsourcing

The REAL problem with outsourcing

Parasitic Outsourcing

 Common opinions:  "Outsourcing robs jobs"  "Outsourcing reduces quality"  "Outsourcing increases delay"   True.  Can't argue against those. But there is more.

Parasitic Outsourcing

  Company A wants work W done.  But wants it cheap.    Enter outsourcing to Company B.    "Just one level of delegation"?     Nope!

Parasitic Outsourcing

  Total Work =   Work W   + Communication effort  + Infrastructure effort  + Decision making effort  + Dependencies  + More people, away from source

Parasitic Outsourcing

  Enter sub-contracting to C  Work W ...   + 2 x Communication effort  + 2 x Infrastructure effort  + 2 x Decision making effort  + 2 x Dependencies  + More people, further away

Parasitic Outsourcing

  What about the money?  W costs to $100  2 employees = $50 each   A is not very happy  2 employees happy.

Parasitic Outsourcing

  Outsourcing, one level:  1 middleman (agent/company)  2 remote employees.   $50 to middleman  $25 to 2 employees.   Middleman ONLY TALKS!

Parasitic Outsourcing

  If middleman has a local clout,  5 remote contractors.  Still, $50 to middleman  $25 to 5 contractors.   Work quality = ?  5 contractors' morale = ?  Anyone happy?

Parasitic Outsourcing

  Coordination = ?  Understanding of problem = ?  Motivation to work = ?  Customer? Workers? Users?  Exploitation.   Only Middleman is happy

Parasitic Outsourcing

  Workers have multiple bosses.  Satisfaction = ?   Decision nodes double.  Mismanagement multiplies.  Middleman is CEO of shop that   hires contractors.  His tangible input? ZERO.

Parasitic Outsourcing

  Alternatives?  Local Employees.  Direct over web.  VOIP / Collaboration / Video Conf  Open source - customization   Individuals over corporations

Parasitic Outsourcing

  Two Problems: Trust and Quality.  Why trust only brands?  Why trust fat corporations?  Why not try individuals?  Ask contractors to prove quality.   Hire individuals with proven   abilities - open source coders.

Parasitic Outsourcing

  "Open sourced HR"    Public, crowd-sourced hiring.  Coder profile on Ohloh / SF.net.   Social networking  Instant "mob teams" ("agile")

Parasitic Outsourcing

  Public profiles.    Highly visible skills.   SourceForge marketplace.   Not trustworthy enough?

Parasitic Outsourcing

  Ignorance of open source                 =  Pay more for lesser quality.    Visit online developer   communities more often.

Parasitic Outsourcing

  Outsourcing to corporations                  =  more bloat & less quality    Don't do parasitic outsourcing.   Reduce middlemen.

Thanks!