I suspect that someone who is standing in a hotel lobby screaming “I’m gonna lose my sh*t” into his mobile phone is probably not going to see his sh*t again anytime soon. Yet there he was lighting up the lobby of the Fairmont in Montreal so, naturally, I had to swing in for a closer look.
Alas, the man whose sh”t had sailed, figured out that he was attracting the attention of the security people and stopped yelling. “Sorry”, he said apologetically, “I’ve been on the phone with Tibet or someplace for three hours trying to get my VPN to work.” Poor bugger.
Speaking of work, I know a risk management consultant who waited three months to be paid by a previously reliable client. The reason? Contractor management had been outsourced to a local daycare centre (I’m making that last bit up) and managers who once simply authorized an invoice were now required to wrestle for hours with a hostile web application just to set up their consultants and then take a free monthly trip back to Hell to approve the timesheets. Naturally, this system required a senior manager or higher to do the administration previously handled by clerks and assistants. Smells like P-Cubers to me.
A personal favourite of mine was a long-ago employer who Outsourcerered their Lotus Notes administration and development to a consultant who would work only on projects which allowed him to bill at least 20 hours. Need a field added? Drop down menu not dropping? You’d better hope there’s a point release coming.
So here we have three examples of Outsourcery. That is, taking costs from a responsible, specialized functional area and, just like magic, making them disappear. Now we all know the costs, like the bunny and the dove, end up someplace. And the someplace is your budget, your time and your productivity. Bunny and dove probably end up in some trousers.
Meanwhile, back in IT, an exultant Geek Lord is collecting a big fat bonus for reducing support costs by 30%, while the P-Cube pretends not to notice that the cost of supporting some poor road warrior with his VPN has simply moved from IT to sales in the form of lost productivity, lower revenue and someone’s sh*t going missing.
The millions of dollars that HR director is crowing about saving has simply shifted from her line to multiple others as senior managers, directors and vice presidents shout at slow applications and outsourced help desks. HR, which is strategic now, in case you missed the memo, will explain that they made it clear that suppliers were not to increase their fees to cover the management tax exacted by the consulting-consultants-to-consult-on-managing-the-consultants. Doesn’t every supplier want to pay an involuntary tax of five or ten percent of billings just so some other supplier can make contract negotiation and payment even slower? Well of course they do.
Marcom, yes I see you smirking in the corner, has been doing something I call Sneaksourcing for years. Instead of employing junior people to crank out routine sell sheets and white papers, they sneak it to agencies who don’t particularly want the work (no trip to Cannes for you, Brochure Boy) and who are spectacularly bad at doing it While the agency fee is likely a wash versus the junior copywriter, the cost to the sales or marketing department to write a brief, explain it, and then review, edit, revise, review again, rewrite, re-brief and sign off on the work is invisible, as is the opportunity cost of not doing one’s day job.
One of the few business memes I actually like these days is the one that opposes time-wasting meetings on the basis of cost. Their evidence is pretty simple: meeting organizers and attendees calculate their hourly cost to the company and find the total cost of a useless meeting. I propose we do the same with our Outsourcerers.
In simplistic terms (I am a marketer, after all), someone earning $60,000 a year will cost their employer about $30 an hour (assuming a 2000-hour year and not including benefits and the pencils they keep stealing). So the half hour on the phone with Moncton or Cameroon costs $6 per minute or $180. Plus $15 in lost time for the victim. Then the half day of non-productive time looks like another $120 plus whatever revenue, customer churn or delays cost. At a minimum it’s about $300 for a routine IT issue.
Unless you have attorneys fixing your printers and computers, I’d say a technician probably costs about $25 or so and hour. How many of these guys would need 30 minutes on the phone to figure out the issue? How many would need half a day to solve it? None. So your cost to have someone diagnose and fix the problem is under $100.
Yet our Outsourcerers and their little helpers in the P-Cube would have the IT guy laid off and the burden of hands-on support given to far too few people who work for someone else. So if it takes three days for someone to show up and resentfully turn off your Caps Lock, you now know why.
While I’m all for efficiency, specialization, and more money left over for employee engagement programs I think we need to punish the people who blindly delegate important things to other people who don’t know or don’t care. Make them go find the bunny.