Outsource culture

Bod

I turned 50 earlier this month and aware that I'm getting grumpier, but surely something is due to change regarding the constant outsourcing of corporate activities?

I work for a large national company which is largely and increasingly run using outsourced contractors.  I'm of the opinion that service and profit are largely mutually-exclusive, which I've seen first-hand when I was TUPE'd from internal staff to contractors 15 years or so ago.  Overnight it went from "how can we improve service?" to "how can we screw the organisation for extra chargeable work and run the service on a shoestring to maximize profit?"

The latest frustration is that our IT service contract has been handed to a company that seemingly do nothing themselves.  Their shiny contract bid and the promise of unicorns for all staff worked well, but the cracks have well and truly appeared now they've got their feet under the table.  It transpires that they have little resource of their own, and actually subcontract most of it.  That's added further levels of abstraction, cost-reduction and lack of commitment and value to the company.  Basically, nobody that attends IT tickets gives a f**k, or is able/willing to carry out the most basic of tasks that would be expected of an attending engineer.  Anything remotely out of contract is dismissed by the engineer, and the end users left floundering.  Every end user I deal with says it was so much better when we had local dedicated engineer resource that knew the details of the systems and the organisation, yet somewhere somebody is being told that everything is brilliant.

Another example is a recent insurance claim in which I ended up having to directly speak to three separate parties - insurer, accident management company, and repairer.  No ownership, a hugely "computer says no" attitude by those that I pay directly for "their" service, and a hugely frustrating experience (avoid Halifax!).

Is there any sign that this ridiculousness will end?  I'm so tired of modern life.

TTony

There is a cadre of Corporate senior management / executive who have created well-paid roles over the last ~25yrs from being outsource experts.

They are appointed to a newCo, they bring their outsourcing expertise and save the company a few short-term £m by hollowing-out decades of internal knowledge and capability, and appointing a team of low-paid no-knowledge grunts in a far-off land to do the job instead.

Or, more accurately, not do the job.

To be fair to the grunts, it's a little unreasonable to expect them to be able to do the job, as they don't have the experience, the job-specific knowledge or the internal relationships and informal comms which are - usually - a critical part of being able to do the job.

To secure that work, the grunts' higher-uppers produce some lovely shiny powerpoints, showing how they can do the same work, more effectively and £m more cheaply.  Largely by (a) making it all up and (b) having far sharper contract lawyers who make sure that a large part of the work that actually needs doing is outside the contract terms and is a chargeable extra.

By the time that this approach is found - surprise, surprise - to be fundamentally flawed and delivering far worse service and no-lesser cost to the naive outsourcer, the outsourcing expert has long since taken their bonus, and moved on to the next fool.  The Execs have taken their bonuses from reducing cost base and the shareholders are happy because they've had their dividends.

But at least you can then bring in some consultants to sort it all out (yes, that's a joke too).

Not really surprising that the outsource service providers are now outsourcing the service provision too - running big shiny offices in India is a lot more expensive nowadays, so having a team in a hut in the Philippines is much cheaper and saves everyone some more £m.

Still, that's progress.

Bod

TTony said:

There is a cadre of Corporate senior management / executive who have created well-paid roles over the last ~25yrs from being outsource experts.

They are appointed to a newCo, they bring their outsourcing expertise and save the company a few short-term £m by hollowing-out decades of internal knowledge and capability, and appointing a team of low-paid no-knowledge grunts in a far-off land to do the job instead.

Or, more accurately, not do the job.

To be fair to the grunts, it's a little unreasonable to expect them to be able to do the job, as they don't have the experience, the job-specific knowledge or the internal relationships and informal comms which are - usually - a critical part of being able to do the job.

To secure that work, the grunts' higher-uppers produce some lovely shiny powerpoints, showing how they can do the same work, more effectively and £m more cheaply.  Largely by (a) making it all up and (b) having far sharper contract lawyers who make sure that a large part of the work that actually needs doing is outside the contract terms and is a chargeable extra.

By the time that this approach is found - surprise, surprise - to be fundamentally flawed and delivering far worse service and no-lesser cost to the naive outsourcer, the outsourcing expert has long since taken their bonus, and moved on to the next fool.  The Execs have taken their bonuses from reducing cost base and the shareholders are happy because they've had their dividends.

But at least you can then bring in some consultants to sort it all out (yes, that's a joke too).

Not really surprising that the outsource service providers are now outsourcing the service provision too - running big shiny offices in India is a lot more expensive nowadays, so having a team in a hut in the Philippines is much cheaper and saves everyone some more £m.

Still, that's progress.

An accurate, incredibly depressing, summary.  I'm going back to bed...

thecolourbox

I don't know what the answer is, but I do just wish to say I agree with you (both).

Part of a wider pandemic of widespread accepted incompetence in my opinion.

In my tiny little world they've tried to bring in outside systems and stuff to "assist" with our job, we all know that means replace ultimately. Thankfully we showed them how they'd actually need to do more work getting AI and lease reading software to quality check it, then showed every minute error it made every time they tested it, along with how long it took us to read the leases and check the data extracts (ie more steps to the process than us just reading the lease and not having to check a data extract) and they left us alone to pick on the accounts team instead. thankfully. We are fortunate

munckee

Companies are desperate not to have such huge pension liabilities and outsourcing gets that off your books. 

crunchman

We had an IT issue that took 6 months to fix because somebody ticked the wrong box when configuring something.  Paying someone internal who knows the system is cheaper in the long run.

The problem is that when you have lost the institutional knowledge, it's going to be very difficult to get it back, so you might be stuck with outsourcing for good.  In the private sector, that might mean losing out in the long term to a well run company that keeps it's knowledge.  In the public sector, we are stuck with poor services from monopoly providers.

darthed1981

Bear in mind the British economy is in the shitter currently and not getting any better, and the "strip everything bare to save the next quarter" mentality is the biggest cause.

The saviour in IT should be that people in the workplace are starting to, very slowly, get over their reliance on first line IT support.  The principle that you can have a guy in India telling people from fifty companies to turn it off and on again as opposed to having a "miserable guy you shoved in your basement and don't talk to but still wonder why they are miserable" who you pay for in total doesn't hold up if everyone knows that stuff and the miserable/potentially happier guy can focus on stuff which is very hard to do remotely anyway.

That means what you have instead is the "modern IT pro" who knows the business processes they support well, and therefore also knows how they can support the business better.

I'm probably a bad example being in job 18 years, and also being the on-site developer - but a lot of companies are going down the road now of what is referred to at my place as "having an Ed" - someone who isn't just the "IT guy" but also helps decide what IT is needed and how it slots in, and can fill in the gaps with a quick web portal, or a database, or a clever spreadsheet etc (or an entire WMS with scanners and EDI and everything if you're me).

You still have to work against the "IT is boring" culture, usually headed by older employees, and also the much-worse people who just think they don't need to know anything more than the five box ticks needed to do their daily work - when they really do need to know that.

Employment is changing as with the minimum wage as high as it is, and AI spreading like herpes, you can't afford a team of idiots any more.

Sporky

But shareholder value! 

digitalscream

Yeah, that's pretty much what happened in my first job. They (Australian owners of a large-ish insurance and pensions company) decided to outsource the whole of IT. No matter how many times we screamed that the variety of technology made it unrealistic, they ploughed on anyway. We were expected to train the people replacing us, too - we were given two weeks.

Now, bear in mind that we had everything a full IBM mainframe, both Netware and Microsoft resource management, Lotus Notes and Exchange, we were in the middle of a project to bring seven entirely different network setups together as one (we'd bought a bunch of companies, which is why they suddenly needed to save money...), there were approximately 7000 desktops and 600 servers...and then there's the 30 years' worth of custom code and applications written in at least ten different languages, of which at least two were beyond obsolete to the point where it was difficult to find people who knew them who weren't in a retirement home.

On they ploughed, because management are utterly blind to the details and thought IT was this magic thing that all IT people just "knew".

The Indian outsourcing company had absolutely none of the skills required to handle it. They thought they could just provide Windows NT resources, and they'd pick it up as they went, so we all took our redundancy payouts and fucked off to our new jobs very promptly, and it wasn't long before we were all getting phone calls from the management asking for assistance.

Company went bankrupt a few years later after poor infrastructure and data management meant that they were breaching all kinds of regulations, and they couldn't afford the fines.

rze99

I'm nearly 60. The grumpiness just gets worse!

Offset

Speaking with more years in this sector tucked under my belt than I'd care to admit, @TTony has got it pretty much spot on.

LionAquaLooper

Has happened to me a few times.  To the OP's question of "will this ridiculousness ever end"?  No - not unless the UK turns communist.  

Outsourcing jobs to cheaper, less skilled (debatable) alternatives isn't a 21st or even 20th century invention.  It's always been the way. 

Mid 1800s North America.  Transcontinental railroad network built.  Majority of workers were Chinese.  Paid less than their American counterparts - and treated worse too.

https://www.theguardian.com/artanddesign/2019/jul/18/forgotten-by-society-how-chinese-migrants-built-the-transcontinental-railroad#:~:text=Chinese workers made up most,shortage threatened the railroad's completion.

boogieman

We had a prime example of this years back when I worked for the Big Telecoms company. I worked on a power maintenance group, part of our job was lift servicing and any call outs to a lift getting stuck. One building in central London had a horrible combination of a 1930s lift that was regularly getting stuck, and was virtually impossible to get parts for, plus a disabled guy who had to go up two floors from his office to use the disabled toilet facilities. Inevitably we’d get sent there to get him out of the lift when the door jammed or it ground to a halt between floors. 

Eventually the lift maintenance got outsourced. I was a bit surprised to get a call to go to this particular building a few weeks later. I told the fault control guy I thought that we didn’t cover this anymore? “Well technically we don’t, but the new lot only have two service technicians for the whole of southern England……and the nearest one is in Portsmouth.” 

Phil_C

Two of my friends who work in two different industries - The minimum/living wage increase has meant they've outsourced their bottom tier work to India/Mumbai.

darthed1981

digitalscream said:

management are utterly blind to the details and thought IT was this magic thing that all IT people just "knew".

Oooh that one is absolutely universal isn't it. 

IT is one skill, you can learn it all in about five minutes, not like whatever the fuck it is "management" do!

LionAquaLooper

The situation will only get worse when companies start using AI more and more because if it isn't bad enough there are millions of adults (even children) out there who companies can pay less money to do the work, now humanity has invented machines to add to that number.  And machines can do it faster, for 24 hrs 365 days a week....for free.  Then outsourcing will be the least of our problems.  Advanced automation will be much bigger.  

Offset

Phil_C said:

Two of my friends who work in two different industries - The minimum/living wage increase has meant they've outsourced their bottom tier work to India/Mumbai.

I've long thought that this activity requires punitive legislation.

TTony

Offset said:

Phil_C said:

Two of my friends who work in two different industries - The minimum/living wage increase has meant they've outsourced their bottom tier work to India/Mumbai.

I've long thought that this activity requires punitive legislation.

If someone thinks that paying UK minimum/living wage is expensive ... just let them find out how expensive it is when they outsource some of that work to a "lower cost" provider

HAL9000

Been there. Most of my working life was in IT (for a large life assurance provider) and everything ticked along just fine until we had a new managing director. One of his first acts was to outsource IT to India because of the attractive bottom line. Truth is that quality went down, time scales (and thus costs) went up, and any in-house expertise was lost. Yes, may have saved money in the short term but I suspect that the long term effects were entirely negative.

GoFish

[Clears throat and begins finest Axl impression]

"Welome to Late Stage Capatalism ... Our profits have to rise ..."

digitalscream

darthed1981 said:

digitalscream said:

management are utterly blind to the details and thought IT was this magic thing that all IT people just "knew".

Oooh that one is absolutely universal isn't it. 

IT is one skill, you can learn it all in about five minutes, not like whatever the fuck it is "management" do!

Yeah, I really don't understand why they didn't understand it. I mean...they outsourced roughly 450 jobs from the IT department. Network engineers and desktop techs were around 100 of those. 30-odd were team leaders.

The other 320 were developers. Even if you just took the time that I'd been there...it doesn't take a genius to figure out that it's going to take a bit longer than a couple of weeks to train their 40 replacements in the collective output of 320 devs over the last five years.