Saturday, 5 February 2011

Outsourcing, the oldest profession

I've always advised clients against outsourcing IT projects.

Since their aims are not aligned to yours, outsource vendors are like the mercenaries and auxiliaries Niccolò Machiavelli describes in The Prince. He said, quite simply:

"Mercenaries and auxiliaries are useless."

It's hard to make people realize that outsourcing salesmen/project managers are answering to shareholders other than your own. But readers of Machiavelli will know this already:

"The fact is, they have no other attraction or reason for keeping the field than a trifle of stipend... they are found and paid by you, and a third party, which you have made their head."

A classic management anti-pattern. Not only are their interests not the same as yours, they are essentially organized labour:

"They are all united, all yield obedience to others."

Once this outsourcer is embedded, they try to tarnish the reputation of employees and bring more of their own staff onto the payroll:

"The principle that has guided them has been, first, to lower the credit of [employee] infantry so that they might increase their own ...  [but] a few infantry did not give them any authority [so] they were led to employ [expensive, outsourced] cavalry ... and affairs were brought to such a pass that, in an army of twenty thousand soldiers, there were not to be found two thousand [employee] foot soldiers. They had, besides this, used every art to lessen fatigue and danger to themselves and their soldiers ... thus they have brought Italy to slavery and contempt."

Machiavelli recounts many anecdotes but this is the most interesting:

"And if the first disaster to the Roman Empire should be examined, it will be found to have commenced only with the enlisting of the [outsourcing] Goths."

It's an interesting comment because it was an idea taken up by Edward Gibbon 250 years later in his Decline and Fall of the Roman Empire.

So, why do companies continue to employ the services of outsourced parties? Well, today as in Machiavelli's:

"the scanty wisdom of man, on entering into an affair which looks well at first, cannot discern the poison that is hidden in it."

So, what does Machiavelli recommend?

"No principality is secure without having its own forces; on the contrary... The wise prince, therefore, has always avoided [mercenary soldiers] and turned to his own."

Failing that, a poor second would be a mixture of one's own employees and mercenaries as the (then dominant) French army had done:

"The armies of the French have thus become mixed, partly mercenary and partly national, both of which arms together are much better than mercenaries alone or auxiliaries alone, but much inferior to one's own forces."

Of course, one should bear in mind that if Machiavelli were so machiavellian, why did he end his life in disappointment and frustration excluded from the politics of his day?

No comments:

Post a Comment