The real question is why doesn't BA management just outsource itself? I'm sure they could find a management consulting outfit could come in and do a better job for far less money. Oh, you think there's something important and unique about BA's management philosophy that can't be replicated by an outside firm? Well, the same can be said of IT. So much of what an airline does depends on not just the presence of IT, but the way it's applied. There's countless little decisions being made every day that shape what the customer sees and what the customer can and cannot do. That's what you lose when you outsource it all. And, for the record, I don't work in the airline IT industry.
par13del wrote:Because you're just a customer, not THE customer. The company carrying out the outsourcing is always going to do things that are in their financial interest but which may not necessarily be in the best interests of the company that outsourced the work
1. Usually out-sourcing companies have their own management, so why exactly does the company doing the outsourcing need competent management, you only need an accountant to verify the charges and ensure cost are being saved.Most time, the local management undermines the activities of the outsourced company.
e.g. less regular testing of disaster recovery, cut down QA work to speed implementation. The company outsourcing needs people that understand the implications of proposed changes sometimes known as an "Intelligent Customer" function. Equally the work that is outsourced is unlikely to be static i.e. there will be enhancements to existing systems, new systems being developed that may be replacing all or part of existing systems and which will always be interfacing with existing systems.
Don't get me wrong, I'm not against outsourcing as such but it involves a lot of work initially as well as continuing work subsequently to make sure your company's interests are fully taken into account.
Been there, done that, got the t-shirt. Big boss decides project X will be outsourced and I will be the minder of the outsourced team. But wait, I'm a software engineer with no training in managing others or finance or what not. Don't worry, they'll do exactly what we want, says he, we're a big company and we're paying them a lot of money, so they'll do just what we want them to do. HA HA HA HA HA. They do what is in their company's best interest. The people in the trenches aren't graded by me, they're graded by their local managers who of course work for a different company. They bid low so they don't have the staffing to make our project go any faster than if we did it in house. Add in the overhead of the lawyers to write the contracts and the managers to negotiate the contract and everyone involved is losing except the managers and the lawyers. Hmm, funny how that works, at least for a while...
@xmyai - good post! This brings it to the point.
Outsourcing as concept basically works. But it requires a very well managed hand over project and an active management afterwards. In the cases I have experienced, neither was the case.
I have seen a number of outsourcing/offshoring projects. None of them gave the expected ROI or quality gain thet was expected.
During the hand over phase, the local experts are made redundant. Hence their motivation is down to a minimum and they have all the possibilities to sabotage the project by telling the contractors staff only 90% of the truth. The missing 10% everyone forgets and no one realizes it was missing during the handover.
The managers on the other hand have often only a rough idea what the ground staff is really doing, so they have not the detailed know how to manage the project. Once everything is outsourced, these guys make sure to leave asap. Their successors have to clean up the left over crap.
When it comes to the day to day work, the outsourced companies loose their know how, hence becoming more and more dependent on their contractor. They then have a very rough idea on what is going on - hence they have lost control.
I agree on the lack of motivation but disagree on the intent to sabotage. There's no need to sabotage. Even a person with the best intentions in the world cannot communicate everything that in an ideal world should have been communicated. Add to that things that people don't communicate due to embarrassment rather than malice (like, oh yeah, we never did get that part of the system working the way we should have, etc) and it's certain that you won't ever communicate 100% of the information.
However it is hard to understate the obvious truth that the people doing the hand off are not motivated to do the hand off because they know they're about to get the sack. They and everyone around them are primarily looking for their next job and whatever remaining low-quality cycles are left go to the hand off. The good ones find work before the hand off is done so everything gets compressed. The managers are quick to declare victory to make the best out of a bad situation so the truth gets buried till it's no longer possible to avoid the truth.
Because you wouldn't and besides, do you really want to hand control of IT systems that are critical to your business over to another party? By all means do it for non-critical systems but not ones that effect your core business.
When you outsource, you are handing off control of IT systems that are critical to your business over to another party. Sure, you own the result, but you no longer have the capability to change the result.
This fiasco raises several questions which, if I was a BA share holder, I would want answers to :
- why the IT systems fell over in this first place
Said to be a power outage, which presumably caused hard failures in the power supplies of various computers due to transient voltage/current spikes.
- why were so many critical business functions affected
These systems are highly inter-dependent. It's easy to add dependencies and hard to remove them. It takes extreme engineering discipline to avoid this problem.
- why has it taken BA's IT staff or the out sourced staff so long to recover the systems