Tuesday, April 27, 2010


Enterprise Architecture: Alternatives to Outsourcing

Many IT executives have given up on their employees well-being and believe that the only way to save money is to pursue the path of outsourcing without considering other alternatives. Let's look at how their thinking may be flawed...

As an employee of a large enterprise, I run across lots of employees who have a variety of backgrounds within IT. Some have achieved their bachelor's degree while working and others stayed the more traditional path of going to college right after high school. Some have pursued Master's degrees while others have pursued technical certifications. Some were graduates of computer science programs while others have majors in more esoteric topics such as biology and english literature. Collectively speaking, I asked several individuals in various human resource capacities to tell me whether the performance of a particular demographic as measured by the annual review process favors one group over another and the answer was not mathematically provable.

The challenge faced in large enterprises is less about technical aptitude and more about the ability to understand the business and its particular challenges. Each corporation has its own challenges when it comes to methods for communication, cultural attitude, willingness to be leaders or followers within their vertical and even what it truly values above and beyond the stated requirements of a job description. None of this can be learned in a university setting.

When I worked for my employer in the late 80's, my salary was only $16,000 a year. I was fresh out of the United States Coast Guard with a high-school education. To be fair, I did have IT experience when in high-school. In those days, the work day was less than 40 hours. In high-school, I worked at Cigna in a department named Application Field Services which had two responsibilities. The first was to be technical support for when IT programmers got stuck and needed guidance, in essence they were the elite of the company. The second responsibility was to oversight into mainframe infrastructure. In this department, I had the opportunity to learn both hardware and software. In fact, I changed out many terminal controllers and even did minor electrical repairs on them. The interesting thing was I would start my work at 2pm and go all the way to 9pm, which essentially was a full-time job in IT while being in high school.

Anyway, someone recognized at an early age that I had the aptitude to be a good IT employee and gave me the chance. Imagine what would happen if America started harvesting all the IT talent that exists within the nations high-schools and start to create the same experience I had for them. The economic perspective says that the average outsourced developer in India from a major vendor such as Wipro, Cognizant, Infosys, etc is billed to the client in the range of $30 to $50 an hour. One needs to ask can you pay a local high school student $15 an hour to accomplish the same task.

The interesting thing is that on one hand, modern enterprises are looking for advanced degrees but on another hand, there are many high-school students that we all know of that are proficient languages such as Visual Basic and Java that could do a better job than many professionals. So, why are CIOs ignoring the basic economic principles. One perspective may say that it is too difficult to find these types of students. I say that the real challenge is in the fact that the majority of IT executives nowadays don't know true talent when they see it and prefer to remain blissfully ignorant. Maybe, they know that if their CEO even thought for a second along the lines of this blog that they would be immediately fired. After all, what does it say about a CIO who doesn't have the innate ability to recognize talent. Can't we all agree that this is job number one of leadership...

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