A reader from a large company sends this along - it's the text of a letter that he's wanted to send to C&E News, but since, as he puts it, "they don't publish anonymous letters and I still need to work", he decided that it would never see the light of day. I offered to help him out with that.
I've written many times on this blog about outsourcing, mainly on the theme of "it isn't going away, so we're going to have to learn to deal with it". And I've seen companies use it well, but there's no doubt that there are companies that are either (a) using it poorly, or (b) taking the idea further than it can go. Outsourcing to a cheaper country is not a magic wand, for sure - the problem is, perhaps, that to an accountant it might look like one. At any rate, here's the letter.
In a recent edition (25th Oct 2010 “The Grand Experiment”) you state that Merck &Co targets 25% external R&D and that AstraZeneca is striving for 40%. I recently talked to all the project managers which oversee our current collaborations. The stories of naivety, incompetence and missed deadlines by the outsource companies were legion. The managers I talked to mostly used in-house resource and expertise to paper over the cracks. Why?
When asked whether they had reported these problems up the chain of command, the answer was always no. The reasons?
1 “If we have four collaborations and mine is the only one reporting problems, which three project managers do you think will get a bonus?”
2 “They won’t believe me, they will just think I am trying to protect jobs here”.
3. “You can’t swim against the tide”.
4 “When it goes bad here, I might be able to get a job with the collaborator”.
5 “My next job will be outside chemistry as a project manager. The last thing I need is any negative vibes around this collaboration”.
6. “I want to be the out-sourcing manager when that is all that there is left here. Do you think I want any trouble to become visible”
So, as far as senior management know, it is all going very well.
Unfortunately I can’t attach my name and organization. I need a job too and telling the truth is not always that popular, as many out-sourcing managers will have experienced. . .
These are valid points, and any company that is using (or thinking of using) a significant amount of outsourcing should pay attention. Just as with internal efforts, Something Upper Management Wants can too easily turn into Something Upper Management Is Going To Do No Matter What. And with outsourcing, the problems can be both harder to detect and potentially more severe. Because what you don't want is Something Upper Management Will Be Told Is Going Great, if it's really not.