Icebergs and sinking ships
This is the point in the story where most advisors, consultants and offshore outsourcing vendors will start preaching the mantra that prevention is the best cure. Not a single CIO will disagree with that premise, but such a recital isn’t helpful when the iceberg has already hit and the ship has a hole in it.
When faced with such a disaster, your options will most likely be limited to the terms of your contract and the outsourcer’s willingness to correct the situation. If you have to plead your case in a foreign court, you can expect to take an additional heavy hit in legal fees whether or not you win the case. The delay in obtaining relief while you wait for the wheels of justice to turn (if they’ll turn at all in another country) will almost certainly add to your woes. In most cases, the best option will be pinning down the vendor on specific actions, timelines and costs to solve the immediate problem and prevent it from growing larger still.
Here are the steps you might want to take:
1) Be very clear about what “solved” is – Stop panicking for a moment and think clearly about what indicators will tell you that the problem’s spread has stopped and what exactly will signal that the problem is actually solved. In other words, define the mid- and end- goals clearly.
2) Outline specific steps, not sweeping actions – One of the biggest mistakes a CIO can make is in walking away from the problem once a course of action is decided with the outsourcer and/or consultant. You have to stay on top of this thing, monitor it closely, or you are simply setting yourself up for more failed deliverables. Instead, break the action into two week deliverables. If you’re seeing or touching deliverables every two weeks, you’ll know progress is being made and effective effort is being expended.
3) Focus on specific targets – Forget the inputs vs. outputs progress measurement. “Percent complete” tells you nothing at this point because you started at 100 percent failure most likely (or some other percentage that is way behind the starting block). Instead, focus on specific targets that are easily definable as “done.” Again, the objective is to jump hurdles and finish the race, not measure the distance of the track. Pay the vendor only at “done” marks so you aren’t out money you may need to shift to their replacement if the original vendor can’t fix the problem.
4) Line up a replacement outsourcer – Yes, this current mess of failed deliverables could be the result of miscommunications and nothing more. But it also can be a matter of incompetency and commitment failures on the part of the outsourcer. While your current outsourcer works at solving the problem, go ahead and plan for failure. That is, begin running scenarios of what this potential failure means, how hard the impact will be on the company, and other such unpleasant reality checks. Then start looking for another outsourcer (onshore, near-shore or offshore) to step in and either help solve the problem or replace the problem (i.e., the original vendor).
5) Buy or rent bailing buckets – Assess whether you can switch key components of the project to temporary alternatives to stem immediate losses and take some pressure off the people working on a permanent fix. Perhaps the cloud, modular datacenters, alternate processes, and other such technologies can help. Weigh alternatives carefully and make a point to know the pros and cons of every option.
Remember too, the advice of the authors of the Harvard Business Review paper:
Leaders should ask themselves two key questions as part of IT black swan management: First, is the company strong enough to absorb the hit if its biggest technology project goes over budget by 400% or more and if only 25% to 50% of the projected benefits are realized? Second, can the company take the hit if 15% of its medium-sized tech projects (not the ones that get all the executive attention but the secondary ones that are often overlooked) exceed cost estimates by 200%? These numbers may seem comfortably improbable, but, as our research shows, they apply with uncomfortable frequency.
Once you are past the current dilemma, reevaluate your offshore outsourcing strategy. Whether you stay offshore or decide to shift to near-shore or onshore outsourcers should be a decision based on all the costs, including possible mitigation expenses, and not just the “In a perfect world” costs.
Whatever you decide, make sure you know the risks and plan accordingly.
“Each identified risk should describe the risk, the likelihood of the risk happening, a mitigation plan, and trigger events to invoke the risk mitigation plan which should be constantly monitored,” advised Boerger.
A prolific and versatile writer, Pam Baker’s published credits include numerous articles in leading publications including, but not limited to: Institutional Investor magazine, CIO.com, NetworkWorld, ComputerWorld, IT World, Linux World, Internet News, E-Commerce Times, LinuxInsider, CIO Today Magazine, NPTech News (nonprofits), MedTech Journal, I Six Sigma magazine, Computer Sweden, NY Times, and Knight-Ridder/McClatchy newspapers. She has also authored several analytical studies on technology and eight books. Baker also wrote and produced an award-winning documentary on paper-making. She is a member of the National Press Club (NPC), Society of Professional Journalists (SPJ), and the Internet Press Guild (IPG).