Thursday, September 4, 2008

Outsourcing History


I just finished listening to Louis Gerstner's audio book 'Who Say's Elephant's Can't Dance?'- about the restructuring of IBM. Amazing story about the change of IBM's business model from selling hardware into a full fledged service company and integrator. The decision was very significant and perhaps precipitated or accelerated the outsourcing trend. Today, my company is outsourcing it's technical and infrastructure work to IBM. My colleagues who are affected will soon move to IBM or may decide to leave after receiving a severance package. I think this is the direct consequence of Gerstner's decision to transform IBM and it's impact on companies like my own.

Of course, the trend may have already started with the outsourcing trend towards Indian companies by companies like GE. As seen in our other outsourcing project, the application support will be transferred not to IBM but to an Indian company. Most of these companies do not have the deep experience of IBM with regards to technical hardware. Nevertheless, IBM transformation may have accelerated this process and made the outsourcing trend into a reality. Hence, hardware and network support are usually outsourced to IBM (which may in turn out source to their subsidiaries in Philippines or India) and application development and support to Indian and Philippine outsource companies.

Listening to Gerstner's book gave me an insight on the forces that led to that decision and the history behind it. Other strands I can also relate to such as the success and history of the IBM system 36. In fact we used to have an old System 36 until it was decommissioned a few years ago and we migrated the application to the newer AS 400 series. But the application remained the same (which is actually the boss man's system) and remained the same with a lot of customization for about 15 years. Only now are we going to replace the system with the help of outsource companies. It's amazing that Gerstner foresaw these trends and adapted or shaped it and where I now have a first hand view on the implication of that decision on my life and career.

So now I am faced with a transformation of my own. I now have to managed the transition of my applications towards these outsource companies. New skills are needed to manage and work and animate the relationship between outsource companies and internal customers. It is a different world now and slowly the internal work will be moved out. There is now a challenge for people like me. If I wish to maintain my current skills, then my future may lie on working with outsource companies. Otherwise, I need to change my work towards a more business orientation to remain in the company. In fact, I feel that I have less interest on the technical side of things these days but more on the management side.

During these days of change, I see that my true strength is more as a business and functional analyst. My SF traits of Learner, Input and Ideation allows me to adapt and absorb new business processes and, thereby, propose new solutions to existing problems. My modest success in project management is that due perhaps to my skill as a business analyst and strategic decision making that allowed me to prosper. But I really do not have the full-blown skills in project managements because I lack thoroughness, planning and neglect to follow-through. These are the weakness that I need to manage. I think I need to make some sort of strategic transformation based on my strengths to remain in the game just like IBM.

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