Core Values, Innovation and Outsourcing

Recent entries in two blogs I follow regularly addressed the effects of IT outsourcing, coming at it from different angles. Shahid Shah, the Heathcare IT Guy, speculated on the future effects of offshore outsourcing on the US jobmarket, based on insights his recent trip to India. His warnings apply to IT professionals in all fields, not just his (and my) field of health IT. The EDS Fellows' blog post reviewed some insights from Geoffrey Moore's latest book, bringing into focus some of the reason why outsourcing sometimes fails, onshore or off. These are must-reads for IT professionals: for managers, for whom outsourcing either already is or will soon be a fact of life; and for us worker bees, who wonder what we can do to make sure we still have jobs five or ten years from now.

• The EDS' Next Big Thing Blog post elaborated on Moore's belief that there are three types of managers: innovators, deployers, and optimizers.  It then goes on to describe one of the classic problems in IT consulting:

Companies that perform outsourcing (or even companies that purchase outsourcing) need to be very aware of one area: When an individual joins a new organization the changes in his role needs to be actively addressed. He’s probably like most people, and until told otherwise, he will try to be successful in his previous role, based on the values of his previous employer. His role as innovator, deployer or optimizer will change based on the outsourced functions, possibly without him realizing it.

Just as generals often fail in the battlefield due to the "fighting the last war" problem, IT consultants come in with good intentions and a mindset framed by their last gig. Having been on both sides of that particular table. the message I get from this is that incoming consultants need help orienting themselves to the local culture as much as do new full-time permanent employees. Wow. That insight alone would have saved the worst consulting engagements I ever had.

Shahid Shah had this warning about the difference between US IT workers and the burgeoning population of Indian software engineers:

...these guys are deadly serious about software engineering practices and processes. SEI CMM Level 5 is not just a marketing slide for them, it’s the way they work because they think it’s the right thing to do. The Japanese took many of our Western ideas about manufacturing process and implemented those better and faster than we did and jumped ahead of us in that industry back in the 80’s. Don’t be surprised to wake up in the 2010’s and 2020’s to see that the Indians do that with IT Services & computer software/hardware R&D. Processes don’t help you invent or innovate but they sure do help deliver. And, from what I’ve seen first-hand, the Indians are definitely delivering (profitably!).

This is in line with my own experience.  Even the 20-something software developers I know still think what they are doing is an art rather than an engineering problem.  This is not to say there is no artistry in software development - it's just that the artistry is well placed if it is either outside the engineering process or well-contained within discrete process steps.

The art of software and system design is in envisioning what can be done with new technologies, and especially blending new technologies with each other or with legacy technologies to invent things that were inconceivable before.  Apple's Macintosh is a classic example of that, blending the nascent PC paradigm with Doug Engelbart's twenty-year-old mouse technology and new algorithms in computer graphics. Stemming from this radical innovation came (among many other things) the software genre of desktop publishing, which totally transformed the print graphics industry.

Can one outsource innovation? Can Indians innovate? Shah says:

...two days of grilling these guys showed that they’re just like us: some architects know what they’re doing and can really think out of the box, many designers have the right ideas that overall principles are more important than specific checklist items, and that coders can work in agile as well as rigorous project models.

And by implication (if I read between the lines correctly), there are also drudges and culls in their midst, just as there are here. I find cold comfort in that thought, however. The Japanese ate our lunch, not just in the auto industry but in machine tools, steel, electronics, and other areas. The Indians and the Chinese are eyeing your (and my) lunch even as we speak.

Some friends of mine started an early Indian offshore development company, Aithent, which has an illustrious record in the IT consulting marketplace, and not just because they cost less (though they do cost less too). Aithent is CMM Level 5 certified and very serious about process. Can they innovate? Peruse their list of intellectual property assets and decide for yourself.

Will your job still be on this side of the lefthand pond five years from now? I think the following areas are very safe:

• Business and systems analysis - if and only if you learn and apply insights from cultural anthropology that have become manifest in many aspects of the field of human-computer interaction, especially user-centered design
• Gaming, especially those based on the virtual worlds paradigm - there will be a lot of competition from overseas, but this area will be so huge that no one will be able to monopolize it. Think of gaming not just as entertainment but as a tool for education, experimentation, and therapy ("serious games"). See this post of mine, and this one too, for more of my insights in this area.
• Computer security - a CIO would have to be a moron to consider outsourcing this at all, much less to offshore. Having a consultant write a plan is one thing, but monitoring systems, conducting black-hat exercises, and keeping your enterprise's systems patched and clean should be done in-house, by someone you know and trust implicitly.

I'm aware there are other areas, but I've gotta go get some dinner. This topic provides endless food for thought, so I have to stop somewhere, and it might as well be here. I've already been embroidering on this post for a couple days and there always seems to be more to say.

Comments

[Shahid N. Shah]

Thanks for noticing my column on offshoring -- you've captured everyone's thoughts quite well.

You said "And by implication (if I read between the lines correctly), there are also drudges and culls in their midst, just as there are here."

You're right -- there are drudges and culls but given their insistence on process and fairly decent reviews they're able to lift up the poor performers' work. Process attempts to lift mediocre players to a profitable level.

Creativity, inventiveness, automation, and innovation were still lacking from what I saw but I bet that another couple of visits would even fix that. I think we need to be worried, not about our jobs, but about being out-executed on important IT projects. If they continue to execute well then innovation and invention are not far behind.

[Hunscher]

I couldn't agree more, on all points.

[Computer Consultants]

I think that the initial worries about the work shifting to India, etc is based on the ideals that software development is similar to automobile manufacture. Yes the software can be put together anywhere in the world and shipped at minimal cost to the end user. Yet the business problems that are being address still only exist in the highly modernised world, ie Europe and the US. Until this fact changes there will be little change to the software landscape accept the 'software factories' being created.

[panasianbiz.com]

This is a fascinating discussion, especially where you highlight the differences between U.S. IT workers and those in the Indian IT industry. We really need to focus on our competitors'characteristics if we have any hope of keeping up with them in this global economy.