Parasitic Outsourcing
The REAL problem with outsourcing

Parasitic Outsourcing
Common opinions:
"Outsourcing robs jobs"
"Outsourcing reduces quality"
"Outsourcing increases delay"
True.
Can't argue against those.
But there is more.

Parasitic Outsourcing
Company A wants work W done.
But wants it cheap.
Enter outsourcing to Company B.
"Just one level of delegation"?
Nope!

Parasitic Outsourcing
Total Work =
Work W
+ Communication effort
+ Infrastructure effort
+ Decision making effort
+ Dependencies
+ More people, away from source

Parasitic Outsourcing
Enter sub-contracting to C
Work W ...
+ 2 x Communication effort
+ 2 x Infrastructure effort
+ 2 x Decision making effort
+ 2 x Dependencies
+ More people, further away

Parasitic Outsourcing
What about the money?
W costs to $100
2 employees = $50 each
A is not very happy
2 employees happy.

Parasitic Outsourcing
Outsourcing, one level:
1 middleman (agent/company)
2 remote employees.
$50 to middleman
$25 to 2 employees.
Middleman ONLY TALKS!

Parasitic Outsourcing
If middleman has a local clout,
5 remote contractors.
Still, $50 to middleman
$25 to 5 contractors.
Work quality = ?
5 contractors' morale = ?
Anyone happy?

Parasitic Outsourcing
Coordination = ?
Understanding of problem = ?
Motivation to work = ?
Customer? Workers? Users?
Exploitation.
Only Middleman is happy

Parasitic Outsourcing
Workers have multiple bosses.
Satisfaction = ?
Decision nodes double.
Mismanagement multiplies.
Middleman is CEO of shop that
hires contractors.
His tangible input? ZERO.

Parasitic Outsourcing
Alternatives?
Local Employees.
Direct over web.
VOIP / Collaboration / Video Conf
Open source - customization
Individuals over corporations

Parasitic Outsourcing
Two Problems: Trust and Quality.
Why trust only brands?
Why trust fat corporations?
Why not try individuals?
Ask contractors to prove quality.
Hire individuals with proven
abilities - open source coders.

Parasitic Outsourcing
"Open sourced HR"
Public, crowd-sourced hiring.
Coder profile on Ohloh / SF.net.
Social networking
Instant "mob teams" ("agile")

Parasitic Outsourcing
Public profiles.
Highly visible skills.
SourceForge marketplace.
Not trustworthy enough?

Parasitic Outsourcing
Ignorance of open source
=
Pay more for lesser quality.
Visit online developer
communities more often.

Parasitic Outsourcing
Outsourcing to corporations
=
more bloat & less quality
Don't do parasitic outsourcing.
Reduce middlemen.

Thanks!