Are You In or Out? In-House or Outsourced, That is?
Network Survival Guide, Part III

George Spalding

Life is full of tough choices. We’ve all had to make them. Very few decisions are all win or all lose. Usually there are trade-offs of some kind involved. Time vs. Money. Speed vs. Quality. Future payoff vs. Instant gratification.

Supporting your network involves some tough choices too. As we’ve discussed in previous columns it is impossible to adequately maintain and support a complex network in today’s business environment without real-time access to technical information being analyzed real-time by well-trained competent network professionals. As the CIO of a small company or the network supervisor of a large one you’ve got basically three choices: 1) Hire the talented people you need and compensate them well so they’ll stay with you, 2) Create these people by hiring young kids fresh out of college and training them, molding them really, into network support specialists, or 3) Lease the talented people and, perhaps, even the entire network support service, from a reputable outsourcing firm who specializes in your kind of network environment. It’s even possible to do all three.

Let’s take them one at a time. Hiring network gurus may seem like an obvious solution. Put an ad in the paper, scan the web, find some good people and hire them. Done. Several problems emerge with this approach: Depending on your type of network it is possible for only two types of people to answer your ad…the incompetent, whose contract was not renewed at his last job but who will be employed again and again because the market is growing faster than the talent pool OR the network "shark," a young, talented but cocky upscale nerd who cruises from one company to another every six months or so constantly looking for the highest bidder. If you hire the incompetent, chances are high that you will also let him go sooner or later, if you hire the shark, he’ll stay with you for six months or so and move on. Don’t get me wrong here, it is possible to hire good network folks, companies are doing it every day. But most large companies currently have several job openings in the network field, fully funded and "good to go" but vacant because they can’t find anyone they want to hire.

OK, so you ads aren’t turning up any gurus but lots of bright and promising young people are flooding you with resumes & URLs and swarming to your door. You know the type, right out of school, real book smart, can recite acronyms in their sleep, have their own website, long on theory, short on reality, the kind who think corporate culture means that General Mills owns Yoplait yogurt. You know the risks. Could be a complete washout, could become your best and brightest? Who knows? You’ll have to pay them less because you’re going to train them more. Not much payback for you in the first year but if they stick it out, you’ll get your money’s worth in year two. Risky but not a lot of other options. Another problem, as they get smarter and more experienced the head hunters will be leaving voicemail, scouting at conferences and classes, and advertising in mags and on the web. These youngsters become valuable commodities pretty fast and they figure it out pretty fast too. You’ll need to develop a career/compensation/growth path for these types to keep them beyond a few years.

That brings us to the lease option…outsourcing. Choosing a company to provide you with the kind of expertise and service that you need and desire usually falls somewhere between a minefield of disappointment and a pastoral walk in the park. It’s a roll-up-your-sleeves, get-down-to-business process that’s most successful between customers who can articulate just exactly what they want and outsourcers who accurately know their talents, capabilities and limitations. If problems do occur, they are just as likely to be caused by the customer’s lack of experience in being an outsourcing customer as the actual outsourcing company itself.

Should I Outsource?

Let’s look at the pros and cons.

Money? Outsourcing costs roughly the same as you would pay for the same service internally. There may, however, be considerable tax advantages to outsourcing as well as a significant lessening of the burden of fringe benefits, health plans, retirement, etc. Initially, there may also a reduction in training expense because the staff of the outsourcer should arrive trained and ready to hit the ground running.

HR, compensation, recruitment? Now completely on the outsourcer’s shoulders. A small $ savings, a huge headache delegated to outside the company. Talent shortage still exists though. The outsourcer is pulling from the same limited pool of talent…chances are high that if you can’t find someone they can’t either. For a time, they might pull one of their best in to help get you up and running but he/she will probably go back to their original assignment. Competency of staff should be part of your contract negotiations.

Training and competency? Depends completely on the details of the contract that’s been cut between customer and outsourcer. Could be completely the responsibility of the outsourcer…but what if the IT organization has switched gears in midstream… "we’re dumping all the routers and moving to a flat, switched network model". Who pays for that re-training? Negotiations can get a little tense during these times. What if the customer is holding a class in-house for their own people? Can the outsource employees attend? Who pays? How much?

Existing staff? Sometimes an arrangement can be made where the outsourcer comes in and hires your existing staff onto their (the outsourcer’s) payroll. Nothing changes except the name on the check and the room number of the staff meetings. Some positives here for the analysts, they still receive benefits, they no longer work for a widget company, they now work for a technology company which can lead to different assignments either within the same company or at a different company, which keeps them interested, lessens burnout and leads to the excellent perception that support can actually be a career not just a job.

Occasionally, an outsourcer is used to augment the existing staff and the employees of both companies work side-by-side doing the same work. I’ve seen this work well in the day-to-day support work. When there are problems they often crop up in the strangest places: the outsourced employees are not invited to the company picnic or can’t participate in the softball league while the in-house people are salaried and don’t get overtime for working on Saturdays. These seem like small insignificant items but it’s amazing what friction they can cause. Both sides can somehow feel put upon or less than the other in specific situations.

Sometimes an outsourcer is used as an excuse to terminate an entire cadre of folks with outdated skills or lousy attitudes. You let them all go, the outsourcer hires back the ones that were worth keeping in the first place. Quick. Effective. Legal. Especially effective when upper mangement is looking for a BIG turnaround in support effectiveness…overnight.

OK, you’ve decided to outsource…now what? First question is what do you outsource? Your options range from -- everything to just hardware or just dispatch service or just phone support, rollouts or ongoing, planning, consulting, etc. You should decide some or all of this BEFORE you begin talking to outsourcers. It will probably change during the negotiations of the contract but let’s have a beginning plan going in. A good rule of thumb to help you in deciding what to outsource is: "Don’t outsource elements of your operation which define the core competency of your organization." In other words, if you are going to outsource support, then do it for elements that are relatively generic like hardware, networks, office suites. Two reasons. 1) Outsourcers tend to do a better job (usually) supporting generic stuff (though some are performing outstandingly well in a more customized environment). 2) Outsourcing gives you access to a high level of expertise in a given area but not total control. If you are dissatisfied with the performance of the outsourcer and decide not to renew their contract, they walk away with all the expertise. If that unfortunate situation occurs, make sure they don’t walk away with the family jewels – the core competencies of your business.

The Contract

A clear understanding of exactly who should do what, how employees will be judged, the criteria for success of the relationship from both perspectives, incentives for exceeding goals, continuing issues like training, upgrades, changes in policy, all these need to be dealt with and spelled out in the clear, understandable language in the contract. Assuming technical competency and decent customer service skills, the contract is the most important element of the outsourcing relationship. Not because of the legality but because a good contract (like a good SLA) will clearly define the parameters of the relationship, what conditions should be met for the continuation of the relationship, the procedures to follow in all predictable cases and remedies for situations if things don’t go quite right.

Outsourcing is not the panacea that some organizations think it is, but when professional outsourcing vendors work openly and fairly with savvy corporate customers it can be a marriage made in heaven.

George Spalding is an independent consultant whose core competencies include tweaking networks and helping support organizations become more productive. You can reach him at: gspalding@helplines.com