For those of us who lived through the "Offshoring" Craze of the mid-2000s, this has the exact same arc.
Corp CEOs / CFOs golf buddies coouldn't stop yapping about how much they saved paying people less by offshoring. So step 1, they fire a bunch of people and send work overseas, driving up their financial metrics for 5-6 quarters until their staff and their organization finally break at stage 2. Turns out cultural and communication barriers are things we haven't really figured out how to communicate across efficiently, and that only a handful of people are truly rockstars at it; others just aren't cut out for it. Stage 3 anyone that is competent to get another job already left, leaving a smoldering shell of company that dies by attrition at stage 5.
You’ve hit on a big reason - short term gains. The partners at Accenture, Infosys and the rest circle the execs at old industry companies. The companies start performing worse, though nothing some accounting gimmicks can’t cover. Then they have a very bad quarter, enough that it will ruin their fiscal year. Fingers start pointing, and talk turns to “belt tightening” and “turning fixed costs to variable.” All of a sudden the proposals from Big Consulting that provide savings bankable this fiscal year sound very good.
It doesn’t take long for the cracks to show:
- Not enough program/project management.
- An intuition that service dropped but no good metrics.
- Retrain the outsourcers after the first team quit.
- Inability to size new projects.
- Shadow IT departments form in the business units.
- The outsourcers don’t care about things like vendor consolidation or holding other vendors feet to the fire.
All of this might still be worth it if it’s done strategically to improve a chronically underperforming IT department. It’s rarely effective when rushed to cover up poor performance of the core business.
Which makeshype ability a API that allows the big players to comandeer small companies into suicidal behiveour , resulting in easy take overs via buy outs. So, the question is not: who is all in on the hype cycle, but who is all out.
Funny thing is, for all the commenters agreeing that this type of leadership is broken, most of the folks here and everywhere end up always doing the same things once they find themselves in similar positions of power / decision making.
well yeah. the problem isn't that its easy and the execs are stupid. The problem is that its really hard, and they only have extremely fallible numbers to guide them (and the reports from various middle management layers which tend to be useless because the incentives for those guys are very far from anything that would allow ceo to make good decisions)
It's easy to see, from the outside, that a given cut stands a high chance of hurting a company. But cuts must sometimes be made regardless
Yep, because the status quo is hard to change and most people get measured, & thus, incentivized, by medium term metrics (at best). especially when investors are involved.
Because in reality, in most cases it works. I worked in many places that had large offshore teams that I worked with closely (India mostly, but also Hungary, Poland, Argentina, Morocco), and people were mostly happy with the arrangement.
There are some cases where the outcome is bad (like the case at Ford now), and lots of people point out to that and say "I told you so". But those are the exceptions, not the rule.
This is still going on, just that they try to keep a few internal tech people. The problem is the incentive for the internal people to stay as they, in theory, should not be making any changes just help out.
The solution is clearly to use an AI to communicate across cultural barriers. It can do translation too so your offshore workforce does not even need to speak your language which will cut costs even more. /s
Corp CEOs / CFOs golf buddies coouldn't stop yapping about how much they saved paying people less by offshoring. So step 1, they fire a bunch of people and send work overseas, driving up their financial metrics for 5-6 quarters until their staff and their organization finally break at stage 2. Turns out cultural and communication barriers are things we haven't really figured out how to communicate across efficiently, and that only a handful of people are truly rockstars at it; others just aren't cut out for it. Stage 3 anyone that is competent to get another job already left, leaving a smoldering shell of company that dies by attrition at stage 5.