IT Outsourcing

Weary Cincinnati/Dayton IT job seekers hope it’s true. Politicians declare that it should be true. Parents of young graduates with Computer Science degrees need it to be true. So is it? Are businesses beginning to backsource (bring IT services that they had offshored back to the U.S.) in significant ways? What about outsourced jobs? Are those moving back in-house?

This month, STAR BASE invites you to help us answer these outsourcing and backsourcing questions by participating in our 2011 Pulse Survey. This brief and confidential survey will go a long way in helping us all better understand the outsourcing/offshoring strategies businesses like yours are embracing today.

And, if you are motivated by swag the way I am, here’s another reason to take our survey. All participants are entered into a drawing for a Powermat wireless charging station. So take a moment, take the survey and share your backsourcing story with STAR BASE.

My esteemed colleague, Kupe Kupersmith, wrote an article for BA Times last week stating that “Agile is a Fad”. Now I know that will get a few of my other friends’ up in arms ready to defend their approach to IT project work. I can see the smoke coming out of their ears now. However, if you read Kupe’s article he says that “the word agile is a fad, the agile movement is definitely a trend.” I think it is safe to say that Agile is the hottest trend in IT project work these days. Many companies have switched over to Agile over these past few years and many more companies are considering the move. It has prompted many training courses by education providers. So let’s take a deep, hard look at the Agile “movement” and see if it is a fad, or is it here to stay? Is Agile really any better than Waterfall? What is the next best thing that will come down the pike?

Agile came upon the IT application development and software requirements arenas like a wave, gaining support as it moved. As education providers developed courses to teach IT application development teams to “go agile”, it gained momentum. All this happened in these past few years in very much Fad style. A fad starts very abruptly and gains momentum as it moves, forceful and overpowering; like a wave. Will Agile be here with the wave reverses course and heads back out to sea? This is where the fad loses its zest, when people realize that this is no better than what we had before, or it is swept over by the bigger and stronger wave of the next best fad to come down the pike. The wave reverses course and heads back out to see and disappears as fast as it appeared.  

Is Agile better than what we had before (Waterfall)? I won’t even go there because depending on who you ask, you will get a different answer. You could ask 100 people and probably get somewhere near 50 yes’ and 50 no’s.   That is built quite a bit on personal opinion. The one thing I notice with Agile as it is used today is that it is misapplied by many companies. They talk agile and think that they are using agile, but in reality they have adopted some of the components of agile, such as sprints, scrums and the daily stand-up meeting, but they miss the boat on delivering a piece of working software at the end of each sprint. When your five minute daily stand-up meeting becomes 15 or 20 minutes, all you really have accomplished is keeping your application development team from doing actual work. There are other places that say they are agile, but their sprint is six months long. According to the principles of Agile a sprint should be a couple of weeks to a couple of months long, with a preference to shorter timescale. So a six month sprint is not agile.

The biggest downfall to the Agile principles that I have seen in my experience is the need for comprehensive engagement of the Product Owner. In my experience, Business managers have a business to run and helping IT develop software is not in their job description, they don’t want to talk to the geeks. However, the smart Business managers know that if you don’t talk to the geeks, hard telling what you are going to get out of them. They need more direction than one sit down meeting saying “here is what I need”; and we will not go into the language barrier. If you can’t make IT understand what problem you are trying to solve, then you probably will not get the best IT business solution out of them.

So, is Agile just a Fad? Through all its misapplications and shortcomings, I don’t see agile going away anytime soon. It will not whisk away with the outgoing tide. Is Agile the “Be All of All”? There are some things that you just cannot develop with an agile approach. Some companies have developed a hybrid of the agile and waterfall approaches, so Agile is not the answer to all of IT’s business solutions problems. What will the next great approach be that comes down the pike? My crystal ball is not working today, but it is sure to hit the IT project management world just the way Agile did a few years back. Will IT management be ready for it? Only time will tell.

Still a very timely topic of discussion, from the person who wishes to transition into a Business Analysis career who wants to know what skills they must have to be a successful BA, to the new BA who wants to know what skills they need to add to their repertoire, to the Senior BA who wants to know where to go next in their career; everyone wants to know how to improve their skills to get to that next level of their career.

Two of my colleagues take on this subject, Kupe in BA Times discusses soft skills vs. hard skills. He notes the importance of soft skills in being a successful BA. Kupe is not suggesting hard skills are not important, he notes that hard skills is what is going to get you noticed, stand out in a crowd, but it is the soft skills that will land you on that next level and keep you there. After all, nobody wants to work with a jerk.

Laura discusses whether Project Management is the next step in the career of a Senior BA at Bridging-the-Gap. She discusses how this use to be the case years ago but is no longer the only option. In fact, we now see the reverse happening where Project Management professionals transition into Business Analysis careers. For those who have reached the pinnacle of their BA career, besides Project Management, they could move into BA Management, creating a BA Office within their organization, Enterprise Analysis, Management Strategic Consulting, Business Consulting, Business Subject Matter Expert or external IT and Business Management Consulting. There are as many paths as there are people willing to forge them.

Elizabeth Larson will be taking on a similar topic at the Southwest Ohio Business Development Conference in April. She will discuss whether Business Analyst and Project Manager should be one or two roles within the organization. At this very same conference I will be presenting the topic “Improving Your BA Skills: From Self-Assessment to Self-Improvement”. This is where I will discuss the many ways you can gain new and improve current BA skills.   This is a conference not to be missed if you are in the Cincinnati area on April 29, 2011.

This topic has been around for many years and as you can see is still a very hot topic today, getting a lot of press. There is no one way to build your career, forge your own path. Remember you are in charge of your career. Unemployment, downsizing or IT outsourcing may derail your plans for a time, but don’t allow that to stop you permanently. For some general guidelines, as Kupe suggests, develop the hard skills necessary to accomplish the tasks of a BA and get you noticed. Then develop the soft skills that will land you on that next plateau of your career. Remember, that your current job is not your career, it is just your current position in your career; you decide where to go next.  Let your passions guide you. If Project Management doesn’t excite you, good; now you have other options to continue your career.

This month I have been exploring the IT and Business working relationship.  It is a hot topic these days getting a lot of press.  STAR BASE Consulting is conducting a pulse survey asking what is the relationship like in your organization.  BA Times notes that your “Customers Don’t Want to Work with You!”  A couple of weeks ago, I looked at the relationship and how BAs could reduce the rivalry, if there is one.  Last week I took the relationship to the Organizational level and described how the Organization can build a unified, collaborative team.

You say Organizational Structure, Seating Charts, Enterprise Analysts (EA) and Business Analysts (BA) are all find and dandy, but what about me and my small IT shop?  I don’t have enough people to split into EAs and BAs.  How do you split one person?  Small-to-Medium Sized Businesses (SMBs) usually have an IT shop of 10 people or less.  Maybe at most 2 of them will be BAs.  I even had one CIO recently tell me that in his small shop he doesn’t really have full-time BAs, but five Programmer/Analysts that do their own analysis.  So we will assume these are the hybrid Developer/Business Analyst role within the organization.  So in this kind of structure, how can we improve the IT and Business working relationship?

In SMBs, where resources are scarce, it is not uncommon for people to perform multiple roles or “wear many hats” within the organization.  In today’s economy, where IT spending and salaries have stalled but the workload has not: IT is getting even more squeezed.  In this situation, when the SMB cannot make one of its BAs the strategic role (EA), or perhaps the organization does not need full-time enterprise analysis activities going on, it becomes even more crucial for the BAs to assist in building a unified, collaborative working relationship between IT and the business.  So let’s look at some of the key points I have discussed in the past two weeks.

Seating Chart - Two Desks

When looking at this seating chart you realize that there is only one person, so you only need one desk, correct?  Allowing the BA to have a desk in the IT Department and one in the business unit of the organization allows them to build a working relationship with each team.  By spending part of the day or week with each team, the BA can understand the challenges each team faces.  Even if the BA can spend only part of his/her time sitting with the business unit that they are suppose to support, it helps build awareness of the daily challenges that the business people face on a daily bases.  This helps the BA identify business needs to improve business processes and make the business run smoother.  This also makes the BA approachable by the business people to assist to work on problems and will help get buy-in from the business people when the BA has analysis tasks that require business input.

Communication is Key

Communication is a key skill for a BA, but becomes even more important in this situation.  The trap that the BA must avoid is the business feeling that the BA is approachable only when he/she is sitting at the desk in the business area.  Or that the BA is available for IT project work only when he/she is sitting at the desk with the IT business solutions development team.  The BA must communicate to both teams that he/she is available whenever they need assistance; it is their goal to assist.  The BA also must represent the needs, desires and limitations of each team to the other.  Make the IT application development team understand the business requirements and why these requirements are needed.  Make the business understand the time involved to make “a simple change” to an enterprise application.  By representing each team to the other, and making each understand the work at hand, whether that is requirements or solution testing, they are creating a shared vision across the organization.

Build the Bridge

Through effective communication of the needs and limitations of one team of the business to the other and representing the each team to the other the BA can build a bridge of understanding between the two groups.  By making each side realize that we are all in this together and desire the same outcome, you can build a relationship of trust and get rid of the “Us vs. Them” scenario and replace it with a collaborative working relationship that brings about better IT solutions to business needs.

Whether in a large organization or SMB, business must go to IT for technology solutions.  Even in an IT Outsourcing situation, there are on-site IT people to directly talk with the business people.  In SMBs, where resources are less and people “wear many hats”, the BA role of liaison becomes more important to overall IT business solutions success.
 

For those of you not following geek things, there is a lawsuit going on between Youtube (owned by Google), and Viacom (CBS, Daily Show, Colbert Report). Viacom is angry that some of their content was posted on Youtube. Apparently, there was 63,000 separate items on Youtube that were copyrighted by Viacom. Viacom has been supported with a “Friend of the Court” brief by NBC, BMI, and ASCAP (Basically the RIAA). Google has similar briefs by EBay, Facebook, Amazon, and Yahoo. How does this court case affect me as an application development person? Well, it could determine your web application development. There are many interesting issues here: fair use, piracy, site owner responsibility. The key issue here is for the very soul of the Internet. As you probably know, the Internet was created to share information amongst researchers around the globe. This communications device allows us to share voice, text, audio, and video. This makes it easy to share ideas, even if those ideas weren’t ours. A part of that communication is the same kind “water cooler” talk that everybody has done for years. “Did you see what that talk show guy said last night”? The only difference is now you can post it. This song expresses how I feel, and I have added some pictures to show how it has affected my life.
The media outlets want the site owners to control the content on their site. They claim that Youtube is a content provider, and thus are “stealing” their content for gain. This would be analogous to suing the U.S. mail for getting a threatening letter. We have fair use,  so any signal sent through the airwaves is free for anyone take and use. This meant that anyone who broadcasted, the content could be consumed by anyone. The content providers made money by placing advertisements in the content. Since that time, content providers have been using congress to side step these boundaries by changing the length of copyright, putting "digital" rights on formerly analog content, and pushing for laws that allow content to be controlled by the provider. The large media companies ignored the Internet because there wasn’t any correlation to their business. When companies like Google started to compete for the same advertising dollars, the large media outlets saw the Internet as a threat to their business model, and are now looking to destroy it.
No one is trying to deny content providers money. It was agreed long ago that your work was yours, but eventually it would be owned by the public. That changed when media companies are entirely built upon their own content (just look Mickey Mouse at Disney). Do people take content that doesn’t belong to them? Yes. Are people just posting items broadcasted to make their point, or to inform? Yes. We have to decide as a society whether the Internet is place to allow copyrighted material as a form of communication. NBC found it distasteful that their shows were on Youtube. That’s why they created Hulu.

What do you want the Internet to be, a free (as in liberty) communication device, or a pay-per-view broadcast medium?

“IT executives increasingly implement marketing initiatives to improve the communications with their business customers. But these efforts often focus solely on the brand aspects of the services under the IT’s control without understanding the business’ perception of IT. To maximize the success, IT must add business satisfaction assessments to its tool kit. Understanding business satisfaction requires qualitative and quantitative data that capture customer expectations and perceptions through different types of interactions such as interviews, panels, focus groups, complaint systems, and surveys. This report provides best-practice recommendations, survey templates, and questions to guide IT executives through the deployment of a business satisfaction assessment. It applies Forrester’s deep expertise in external customer satisfaction to the interface between business customers and their internal IT suppliers.” says a new Forrester report.

I have served on countless business application development teams within several organizations in the Southwest Ohio and Cincinnati Information Technology community, one thing I can say is that most IT organizations do not gauge business satisfaction with IT business solutions.  I have served in only a couple of organizations where the business serves on the IT governance committee.  An organization does not have to be “big” to have an IT governance committee.  No matter what the size of the organization decisions are made as to priorities in IT work.  IT governance does not have to be a long drawn out process or take great time commitment from the business or IT executives, but business involvement in IT governance goes a long way in gaining business buy-in as you roll out the IT business solutions to the business.

Involvement in IT governance is just one way that many organizations in the Greater Cincinnati area can improve the IT-business relationship.  The Forrester report goes into ways to solicit and gauge business satisfaction with IT business solutions.  Doing so should affect decisions concerning not only IT business solution delivery but also IT Infrastructure and IT outsourcing initiatives.

 

Seems like it has been a while since I have had a chance to do a post.  For the last 3 weeks things have been absolutely crazy in our IT consulting world, but in a good way.  We had a chance to go to the Techserve Alliance national conference in Las Vegas.  I have heard all the jokes, including the one about it staying in Vegas.   We did learn that just because you are pre-checked with the airline, does not mean that your bags are.   We got our bags checked with literally a minute to spare and fortunately all made it back to Cincinnati.

Upon return, we signed a support contract for a new customer.  They trust us enough to outsource their entire IT applications support to us.  We have a real life example of an IT Strategy that was discussed at the conference (See #3).  Not only was IT strategy discussed but business strategy as well.  Here are some highlights:

1. Market Differentiation - customers have lots of choices, how will you stand out?

2. Improve Systems and methodology for delivering service- excellence, efficiency, depth of service.

3. Outsource what you can-eliminate the busy work that does not add strategic value.

4. Deal with the economy being slow to recover till 2012, spend your money wisely, hire wisely, fire quickly, and refine what is working, stop what is not.           

5. Build Alliances with like minded providers in different industries and sell collaboratively to serve the customers' need.

My favorite of these five is number four.  Said another way, its takin’ the basset hound to the farm.  I’ll expand more on that in my next post.

• Network security specialist: A person familiar with intrusion detection systems.
• Penetration testers: Someone who can assess a system's potential vulnerabilities.
• Incident handlers: People who understand attack methodology and can apply critical thinking skills to respond to incidents.
• Forensics Analyst: The person who looks for evidence after an attack.
• Research Analyst: The person to keep abreast technological advances in incident response activities.
• Team Leader: Leads the team through crises and communicates to the business incident activities and cost to the business.

• Preparation and Training: for both prevention and incident response.
• Identification: fast identification of an occurring attack and its impact on the IT infrastructure can help in minimizing the duration and cost of clean-up.
• Containment: Once an attack has been identified, steps must be taken to minimize the effects of the attack.
• Recovery and Analysis: The recovery period allows analysis and lessons learned of What happened? Why did it happened? Was the response effective?

With the economic news being what it is and it being Friday, I decided to lighten it up a bit. We application development types are known for our twisted, not-so-mainstream places on the Internet. Back in the day there was "Foamy the Squirrel" (not for work consumption), and "Homestar Runner". YouTube has somewhat replaced the flash sites for interesting content, with "Chad Vader", "Ask A Ninja", and "Harry Potter Puppet Pals". My new favorite on YouTube is "B&J Supers Squad". It shot as a PSA with guys dressed up as Batman and the Joker performing tasks like how to properly ride a bike and lifting heavy objects. For application development types who are NOT squeamish, I recommend "Klaus the Forklift Driver" on YouTube. It’s in German with English subtitles. It is both disturbing and very funny. So I showed you mine, what crazy clip, flash site, or Geek underground item do you have for me?

I read today that unemployment has risen to 7.6%.  Yes, its official – we are in a recession.  However, that does not mean there isn’t opportunity because there is.  If everyone believed everything the press is saying our economy does not have a chance and the United States is going to cease to exist.

I also read today that the U.S. government is going to re-visit its parameters for H-1B Visas because they are being used by recruiting body shops rather than giving foreign nationals the real opportunity that they seek.  This means that application developers and specialist are going to be able to make up ground that they have lost to foreign nationals in the past.

My suggestion is for developers to increase their skill-set now before the economy begins to get worse.  Information technology consulting has never been a steady business it always has had peaks and valleys.  When the economy is good projects are plentiful.  When it starts to decline projects usually come to a grinding halt.  But is you have multiple skills it decrease your odds of becoming a statistic.

Organizations try to do more and more internally rather than outsource it when the economy begins to falter.  The more skills a person has the better chances one has to stay employed.  This holds true for IT staffing, development and consulting.  Additionally, when a developer or infrastructure architect can show an organization how to safe time, investment and people through the implementation of their solution they will endear themselves to that particular organization.

Good information technology strategy can more than pay for itself in this economy.  Organizations everywhere are dependent on technology and they need processes to become dynamically automated so they can accomplish more with less while the move towards models of efficiency that will contribute to the productivity of the organization.

Make it your mission to learn more applications and methodologies that can greatly increase the productivity of any company.  To do this is to build value for the organization and you by ensuring there will always be a job for those that are willing to innovate and create a better way.  

This is your opportunity.  Make it happen!

There is trouble in the near future for talent needs and it is coming in various flavors:
 

• According to the Bureau of Labor statistics, in 2010 over 10M jobs in the United States will go unfilled – in 2022 it will be 30M jobs

• College graduation rates are down to 54% and 75% of new jobs will require a college degree

• Making the wild assumption that Baby Boomers (44 – 62 years old) will leave the workforce when they are retirement eligible (is that at 55 or 65?) – there isn’t enough Gen X (28 – 43 years old) to replace them (78M Boomers versus 40M Gen Xers). Gen Y (7 – 27 years old) is big (70M), but still lacks the experience (hello…most haven’t even graduated) to make an immediate impact

• The average time in a company for Gen X is four years; for Gen Y it’s more like two and while the Boomers have been pretty loyal in the past, but the technology market hasn’t exactly rewarded them for that loyalty.

• According to an AARP survey of Boomers - 31% of mature workers became responsible for a dependent parent; 23% had an adult child move back home; and 16% were providing child care or day care for grandchild.  50 to 80 hour work weeks, while tolerated by Boomers and some Gen Xers, won’t be tolerated by Gen Y and won’t be of interest to Boomers as they ‘mature’ in their careers and many take on the care of family members. So, since everyone knows that a 40 hour work week for technology professionals is a joke – who’s going to be doing all the work?

Well, I was thinking there are a couple of answers here but those answers will involve a major paradigm shift in the way we think about our workforce today. 

Baby Boomers are learning very quickly that retirement will have to be postponed because of our current economic conditions.  This wealth of knowledge can be instrumental in assisting those organizations that are struggling with Information Technology Staffing because these folks are going to be around a little longer than they planned!
 
Information technology departments will have to create a hybrid workforce model that will be made up of Baby Boomers, Gen Xers and Gen Yers.  Still another approach is to work closer with IT outsourcing partners to ensure you have the talent that you need.  My organization, STAR BASE, Inc. makes finding superior IT talent for IT jobs a fulltime pursuit.

Finally, another emerging model that will be downsized IT department with only mission critical personnel and several part-timers that will be used from time-to-time.  This model will be subsidized from time-to-time by outsourced to information technology staffing partners that can assist in bridging the gap.

The global economy is tanking, layoffs are everywhere but organizations need to remain positive and work through these difficult times.  Information technology is no exception to this statement.  Often times when companies decide to cut budgets the information technology department is a prime target to be cut.

So, what can a prudent CIO do to address budget cuts while still operating his/her organization at a competitive advantage?   Here are some suggestions that may help:

• Ratios - Look at your ratio of onsite permanent IT employees.  Perhaps you could reduce the number of permanent employees to only those that are essential to the mission.  Outsourcing the rest of the work to a local firm often times is far more cost effective than permanent employees.

• Time-to-Market – If products and applications can be delivered faster, though a combination of in house personnel and outsourced talent then companies will reap the benefits sooner.  Work closer with your outsourcing partners to save time, investment and even the dreaded budgets cuts.

• Revisit your Processes – By working closely with your outsourcing partner.  If your team can find how to deliver applications an automated process with fewer touches and less defects there will be less time and money spent on re-works.  IT departments must leverage knowledge, experience and tools to gain a competitive advantage while decreasing cost.

• Productivity Improvements – Your internal and your external outsourcing IT partner must embrace being able to accomplish more in less time and at a lower investment.  The true business value of IT will be felt across the enterprise.

• Negotiate Your Rates – Any true business partner or business technology consulting firm, will be open to rate reductions if you are willing to negotiate a long term partnership.  Dedicated consultants are looking for long-term business partnerships.  If you are willing to commit to a set amount of hours they will br eilling to negotiate rates with you.

Application development outsourcing and IT staffing outsourcing can have many benefits in these times of economic challenge.  Your organization still needs to operate on a day-to-day basis.  Re-think your approach for the mutual benefit of your organization and your outsourcing partner.
 

Many organizations that are a part of IT outsourcing and business transformation outsourcing (BTO) are slightly concerned about the economy in 2009.  However, IT outsourcing was important before Bear Stearns, Lehman Brothers, Freddie and Fannie, AIG, and the big three automotive manufacturers. These events have underscored the importance of outsourcing because companies believe that transformational outsourcing can help them to service the economic downturn.

According to the International Outsourcing Forum (IOF), "the global outsourcing and off shoring market is expected to grow from approximately $10bn today, to between $50bn and $60bn by 2009". This dramatic market growth will create an additional three million jobs worldwide by 2009. While one million jobs are likely to remain ‘near shore’, the remaining two million will be relocated based on the price performance of location."

I believe here in the United States that when it comes to technology and the value it can bring, organizations realize that it is a vital lifeline for their very existence.  More and more organizations are also coming to the realization that they do not have to do everything internally but can partner with the right trusted technology consultant to handle many of their IT needs.  The economic downturn events of the past couple of months have made organizations come to terms with their vulnerability and question what they will need to survive in the coming years.

IT Outsourcing will remain a viable business in the year 2009.  As companies seek to reduce payroll while increasing productivity there is going to be a need for IT talent.  Where will organizations look for this talent?  The answer is quite simply where ever they have to.  More organizations are going to increase their working relationships with those trusted partners that can help manage their risks and provide IT talent on demand.

I predict that IT outsourcing and technology consulting will have a “busy year” next year for three reasons:

1. The slowdown in the world economy
2. The Presidential election is over and some level of stability will occur
3. Organizations realize that technology can make a huge difference in productivity and profitability and will seek out trusted advisors to assist them in making a difference

Those are my thoughts, what say you?