Outsourcing: Bad Word or Wrong Word?

(Note: Today's article is a bit off my usual Legal Project Management beat.)

Ron Friedmann this morning presents an interesting way to look at outsourcing.

His most striking point, I think, is this:

Every law firm employee, in fact, works for an outsourcing organization. In-house counsel can "make" legal services or "buy" them from law firms on an outsourced basis.

There has been lots of debate about outsourcing - and not just in the legal community. Many employees fear outsourcing, at least in part because it appears to threaten their jobs. They often couch their fears in terms of work being of lesser quality, a point Ron addresses in his post.

Ron debates whether outsourcing is a "bad word," so to speak. I want to look at a different issue - is it the wrong word?

All Managers "Outsource"

All managers - both line managers and project managers - "outsource" most of their work. It's called delegating.

When I ran a product for Microsoft some years ago, I "outsourced" pretty much everything. Product development? I didn't do it myself, and thus I outsourced it. Sales? Ditto. Legal advice? Yup, outsourced. Product design? Outsourced. Tech support? Meeting scheduling? Office supplies? All outsourced.

Though I "outsourced" more than these jobs, I chose to list these seven functions in particular because each was outsourced in a different way:

  • Product development: Done by a team of Microsoft employees in India that reported "dotted line" to me but for HR purposes reported through the Indian subsidiary.
  • Sales: Handled entirely by other teams within Microsoft. My team helped set sales targets for the product as a whole but not for individual salespersons. Indeed, most salespersons sold the range of Microsoft products, including mine, to large corporations.
  • Legal advice: Handled by another team in Microsoft - Legal and Corporate Affairs - and then "outsourced" to outside counsel as needed. I had no input and little visibility to this outsourcing, and we were not charged back for the work.
  • Product design: Done by people who worked for me - traditional "delegation."
  • Tech support: Handled by the Microsoft Customer Service and Support organization and charged back to us. It was a mix of Microsoft employees, contract workers, and third-party vendors, some in the US and some elsewhere - but I know that only because I had done some partnering work with that organization elsewhere in my Microsoft career. Otherwise, it was a total black box.
  • Meeting scheduling: Handled by an administrative assistant who was employed by a vendor but who worked full-time at (but not for) Microsoft. I got to choose an admin from candidates presented to me, but they all worked for a vendor, and over time they were rotated out of Microsoft and onto other jobs. So I delegated to her directly as if she'd worked for me, but technically she didn't - and I wasn't responsible for her career growth, compensation, etc.
  • Office supplies: Some vendor supplied this stuff when we needed it. I don't recall who the vendor was, and it didn't matter; this was pure commodity best-price outsourcing.

In other words, I rarely thought about which of these "outsource" models was in play for any given task. Obviously, the model mattered when it came time to career counseling, one-on-one meetings, performance reviews, and such, but in terms of who was executing on my work day to day, the model didn't matter. Delegation? Partnering? Outsourcing? Yes, to all of the above.

At some level, they're the same thing: I am trusting someone else to deliver on work I need to be successful in my job.

Read the rest on the Lexician Blog.