Readers Debate Offshoring Management

By CIOinsight  |  Posted 06-30-2005

Readers Debate Offshoring Management

In a column earlier this month, Jeff Angus suggested that we offshore technology executives and managers and asked for "pro" and "con" arguments on the following resolution:

Resolved: That offshoring technology executive and/or development management will benefit project effectiveness and organizational competitiveness.

Below are some of the responses:

Subject: Con
You make this statement early in your article:

"If the basic problem in American application development is American management, we should in-source developers located here in North America (where their proximity to the users enriches software quality), and outsource executive and other layers of management to offshore companies."

However, software developers rarely, if ever, have ANY contact with the end-users; that is performed by the very managers you would offshore, making this arrangement impractical.

Paul Baker. San Diego, CA

Subject: Pro
My company is outsourcing most of our programmers/tech support to China.

I asked management, if (when) Taiwan declares independence, and China invades, (the USA has promised to protect Taiwan) will our off-shored employees still be allowed to write code for us, even though we are at war with them?

I didn't get an answer.

Howard Barker

Subject: Pro
Given that technology executives strictly adhere to the four-step management principle, it would save money and space to move this function offshore. Training on the four steps could be complete via email in under an hour.

Step one. Make promises you cannot possibly keep. Step two. Blame your predecessor. Step three. Reorganize without any regard for the company's goals or staff resources. Step four. Prepare three envelopes.

Lest we be overly concerned about the executives who will be displaced, rest assured that they will start offshore consultancies, where they will teach people in Bangalore how to prepare to become four-step executives. Thus is born the ultimate win win win scenario.

Craig Herberg

Subject: Pro
1. Why just IT Managers? Why not the whole upper echelon?
2. I found a great sounding recipe for mutton. New Zealand here I come.
3. Why do I feel that one leg is getting stretched longer than the other?

Jim Musto

Subject: Pro
The concept of offshoring becomes popular because of the pressure of "reducing cost."

Who is under this pressure and who is making the decision to reduce the cost? The answer is ... "management." Typical process to achieve this goal is starting from the bottom. Therefore, America corporations first move all bottom IT folks to India (many of them are just like tools in your toolbox; easily replaceable).

If this is not enough, they will cut the middle management and move the responsibility up in the chain (more painful to replace but doable). Eventually, they'll outsource the entire IT dept. (perfect idea!). Going in the other direction won't work because someone must still lead this group of highly paid IT folks.

King Hills

Click here to read Angus' original column, The First Thing We Do, Let's Offshore the Managers. Click here to read his most recent column, picking the best of the letters denouncing or supporting the proposition.

Subject: Con
Whether a project succeeds or fails nearly always depends on upper level commitment. To imply IT manager's control this is a misnomer and scapegoating. Savvy CEOs may bite initially, but as expenses rise and services are itemized their choice will soon waver. More IT as a service spiel.

Unfortunately for some, it's the future. The classic example is that VP who saves the company by cutting cost in year one, receives his/her bonus and leaves the contract negotiations for the next, neither of which have the knowledge or experience to manage. But what do I know.

Theochares, George

Next page: More pro, more con.

More Pro, More Con

Subject: Con
The proposition is nothing new. This is already happening. This is the next stage in the outsourcing process. You have to bundle the application development as a process and offshore it.

So, for example, if the function of an IT-related department is to support the technology requirement of (say) Wealth Management Group. You can offshore this function entirely, which includes management and individual contributors. The management of the offshore group will then deal with business managers onshore to support their requirements.

What you are suggesting is that insourcing technology workers and outsourcing technology management simply does not make sense from a communication and ownership perspective. Who is ultimately responsible for the function? Workers or Management? Who will the business manager call or have a face to face meeting with?

Bottom line: who will interface with the business client and take responsibility for technology implementation—worker or manager?

Sanjeev J. Nair
NetBenefit International

Subject: Con
I don't believe that this is a good idea at this time. First off, who's to say that the offshore managers would make decisions that were any better. At least you can possibly go and berate the idiot in person. And secondly, with students already out of school and having snatched up all of the "you want fries with that?" jobs, there are no jobs left that the incompetent managers are qualified to do. So we could end up with unreachable offshore managers making equally horrible decisions as those made by the guys that we are now paying to sit at home and collect their unemployment checks.

Wm. F. "Jeff" Davis, WVU Network Services

Subject: Pro
The issue is morale. While some think it will take a pretty big drop when you literally can't understand what your boss is saying anymore (an intentionally rash and inaccurate generalization) I argue that you'll see a tremendous increase in morale. Why? Because Dilbert has gotten a little stale as of late. Imagine the doors that will open for Scott Adams when our leaders and managers come from countries like India, Argentina, or Siberia! Then Dilbert will once again become the icon of line staff everywhere, and ultimately the overwhelming majority of us—the folks that do the REAL work—will vote Adams into office as the next President. 'Nuff said.

Paul Gillespie

Subject: Con
The proposition is based on a faulty premise. Nobody offshores a single programmer—they offshore a team of programmers. The math of offshoring would be:

20 programmers * ($75,000/year - $25,000/year) = $1,000,000/year in savings
1 CIO * ($275,000/year - $50,000/year) = $225,000/year in savings

If your resolution is that there are too many hidden costs to offshoring for it to be an effective strategy, I agree. If you believe that better tools and methodologies can make American programmers far more productive, I whole-heartedly agree. But we should be honest with the numbers.

Jon DeShazo

Click here to read Angus' original column, The First Thing We Do, Let's Offshore the Managers. Click here to read his most recent column, picking the best of the letters denouncing or supporting the proposition.

Offshore the Managers
First of all, the argument could be made that managers as a class are virtually offshore already, as they perpetually live in management-theory-land. That is the perennial management issue, resulting in all sorts of otherwise inexplicable consequences, e.g., group-think, smoke & mirror methodology, and other lemming-like behavior. If one accepts this as a starting point, it's merely a matter of physically moving the bodies to a suitable land of opportunity. But determining that is a task for another project ...

Larry Bressler
N.B. - Being a manager myself, I have observed this behavior up close and personal.

Next page: More pro, more con.

More Pro, More Con

Subject: Con
In response to your article "Why Offshoring Will Always Be a Novelty, Never a Valuable Strategy," I wish this was true, but people in upper management have bought the idea that development is a simple commodity and should be moved to wherever it is cheapest.

The company I work for has created a new branch in India and has allocated that all development will be done there by the end of '06. This is despite the fact that almost all offshoring attempts so far have failed. The perceived bargain of one third the cost per developer is too tempting. What is ironic is that the productivity will drop by more than the one third of cost so it will actually be more expensive.

Eric Brantingham

Subject: Pro
I am living proof

If all the workers are outsourced then what is actually meant by outsourcing the management? Because really, by your definition I am outsourced:

1. I am not located in the same country where the worker is being done.
2. My users are not necessarily in this country either.
3. So I really have nobody to talk to in English
4. I write emails and conference calls to them with nothing to say.
5. And they absolutely NEVER listen to what I try to tell them anyway.

The stupid answer to this stupid question is that we can get away with managing here because there really isn't anything being managed.

If that one doesn't work then try this excuse: This presupposes that the management actually does something that is worth paying for.

Gail Horwitz
Webmaster Mortgage-Education.Com

Subject: Con
While outsourcing managerial talent is fine as a concept, it is already being done. First, accounting firms have long had prosperous consulting businesses for other businesses in the U.S.: the firms are "outsourced managers." Second, foreign companies hire U.S. workers, thus outsourcing the labor, but accomplishing the previous task: outsourced managers from the U.S. viewpoint.

However, we don't seem to identify any cheap, competent managers anywhere else in the world. Both groups of outsourced managers cost more than homegrown U.S. managers. Perhaps education of the managers or accountability to shareholders is the solution to the problem of bad decision making.

Jim Conover

Subject: Pro
The benefit of offshoring comes from lowering costs faster than your competitors, thus giving you an advantage in margin until they catch up. So as you progress from Support to DBA to R&D to Accountants, your competitors do the same, and you're all even again.

At some point, the only group left to outsource is Management. It especially infuriates the Europeans when I ask why corporate strategy can't be decided just as easily in Malaysia as in Houston or London or The Hague. So regardless whether you start with it or end with it, it's an inevitable conclusion.

Chuck Hinkle Houston, TX

Click here to read Angus' original column, The First Thing We Do, Let's Offshore the Managers. Click here to read his most recent column, picking the best of the letters denouncing or supporting the proposition.

Subject: Con
I believe your article to be mostly, if not entirely, tongue in cheek written to create a reaction and perhaps provide fodder for future articles. Interesting enough still to invoke a quick response from me to the thought of off shoring management, especially senior management such as CIOs.

"The first fracture point is proximity" seems to be a worthy concern that is amplified as you move up the Leadership food chain. Perhaps a middle manager who did not have a direct influence on the team's progress could be off-shored but a direct report manager would significantly hurt the development efforts and a more senior manager who sets policy, establishes and insists on the enforcement of process stands such as CMM or ITIL just would not work.

Finally on this chain of thought, the more senior leadership should be business partners influencing strategy, attending executive staff meetings, and being seen as a peer of the operational staff.

"The other fracture point is culture ... Departmental and regional ... Without a native context, little facets of behavior don't fit snugly together" seems to sum up why I think management just would not be effective off-shore. Management establishes the culture to a great extent and having an influential manager off-shore doesn't make a lot of sense. Not to mention the communication and relationship differences that drive day to day decisions and commitment.

"Off shoring is most cost-effective when the work involved is a commodity" is an interesting comment in this context as any assumption that management is a commodity seems flawed.

The subtle, soft skills that are required to move up the management chain and be effective are anything but a commodity, and a good leader/manager is harder to find than you might think.

Frey, William

Next page: More pro, more con.

More Pro, More Con

Subject: Con
While as Sr. Manager for a pharmaceutical company, I too am a victim of self interest and against seeing my job (let alone anyone else's) sent overseas.

That being said, I wonder where project managers or project leaders fall? Are they under management? I would think since management gives them a fair degree of autonomy implementing the project and last time I checked, project managers were not cheap. I say outsource the project leaders/managers ... all they do is ask questions ... hell I could do that.

Besides, everyone knows that it is the business/client side that dictates the success or failure of projects—not IT. Bad requirements, inbalanced participation, varied levels of interest add an incredible cost to any technical solution. How having people/teams 5,000 miles away is going to reduce this element is beyond my reasoning ...

Thank you for the opportunity to write. I am excited to see the overall results.

William Kerilla

Subject: Con
Reasons presented in the Article for offshoring management are distractions. They mostly relate to incompetence in management, whether onshore or offshore. Solution: insist on competent management (or development) wherever it's located.

Today, effective leaders are neither onshore nor offshore. They must be globally effective, regardless of location. Part of being effective—delivering results—involves finding low cost, competent resources, again wherever they exist.

The work of managers interacting with their customers and other constituents face to face is probably more critical than programmers interacting with users.

The cost savings of offshoring one senior executive position is certainly higher than one developer. But, obviously there are many more developers than CIOs.

Dennis J. Crane
President, Business Navigation Group

Subject: Con
Offshoring management alone can't possibly work any better than offshoring developers or "line staff," since the crossing of time zones, languages, cultures, etc. would remain as one of the most important limitations to offshoring effectiveness.

Despite what anyone might claim, in order for offshoring to be successful it not only must be commodity work, but it must be work which does not require significant management relationships across the culture/language border.

That is, you'd have to offshore both the call center line workers and their managers all the way up to the level at which there doesn't have to be substantial daily communication with the U.S. home office.

In other words, it's not that the work must be commodity work, it's that the unit of work, including whatever management is necessary, must be a commodity as a unit.

Daniel Billingsley

Subject: Pro
It is about time that someone came up with this solution. I will give one example of how this is much better than what has been happening in the IT workforce:

For each $250,000 executive that you send overseas, you can keep or re-hire five good and experienced support people that are actually local and that you can understand when you need help to get back up and running. Better support means happier customers and that equals money.

Aaron Fadeley

Click here to read Angus' original column, The First Thing We Do, Let's Offshore the Managers. Click here to read his most recent column, picking the best of the letters denouncing or supporting the proposition.