Sunday, July 04, 2010

Outsourcing blues - Managing Client Politics

Every organization has its share of internal politics with so many different groups having conflicting interests. It is always a great challenge for a CIO to negotiate all these political alignments within the organization and implement an IT strategy spanning across different groups, departments, business units etc.

In most organizations, IT is still seen as a major cost center. While a lot of investments are required to build and maintain IT systems, the tangible benefits are less. The benefits may come in different form - increased sales, better employee productivity, higher customer satisfaction etc. But most of these benefits are intangible and cannot be expressed in numbers (profits). Hence it becomes very difficult for a CIO to convince the rest of the organization on investing more in IT systems.

While an 'in-house' CIO and IT department themselves have a huge task in negotiating the political alignments, the situation becomes even more challenging when you throw in an outsourcing vendor or worse, multiple outsourcing vendors. Although the practice of Outsourcing is fast spreading across the developed world, there are also a number of concerns among the employees of the outsourcing company - Loss of jobs, loss of control / power within their departments, distrust of foreign players etc.Under such circumstances, negotiating organizational politics of the client is one big problem faced by the vendors. More often than not, the vendors have to work with multiple departments and implement systems spanning across the organization. Being outsiders, they do not have the required political clout within the client company to force the warring parties to the negotiating table. The result - Non-cooperation, deliberate witholding of information, political manipulations, blaming the vendors for anything that goes wrong etc.

Over the years, I've seen a couple of such instances. In one of my earlier projects, we needed to talk to the business users belonging to two different groups. One of the groups supported that particular IT implementation and hence was very co-operative. On the other hand, the other group did not like this implementation and hence did not cooperate with us. They deliberately avoided meetings, gave insufficient data or made us wait for long periods of time before responding to our queries. The responsibility kept getting passed on to different people and we were stuck with no definite point of contact to address our concerns.

In another instance, the different groups in our client company did not want to cooperate with or depend on each other. Hence, over the years, each of them had built separate and redundant IT applications for their own needs. The net result was that the company eventually had hundreds of applications with no one to provide a complete bird's eye view of how things worked in the organization. Now, as Outsourcing vendors, we are sometimes forced to toe the same line as them, rather than consolidate the applications and eliminate the redundancies across the system.

What can an outsourcing vendor do in such scenarios? I can think of a few possible ways:


  1. The outsourcing vendor should identify an 'IT Champion' in the client organization and work towards getting his / her support. Without the full support of some senior person in the client side, the vendor cannot hope to achieve anything. This 'IT champion' should have the required political clout within the organization to bridge the gaps between various groups.
  2. Analyze and draw the Organizational view of the IT systems. Explain the current IT situation to the senior management of the client and clearly elucidate the problems. Vendors should also present an alternate scenario that would benefit the clients. Any big changes across the departments should become the official policy guideline of the client in order to be successful.
  3. Before taking up any project / implementation, analyze if any other existing system in the organization can be utilized for the purpose. This will save the cost of ’re-inventing the wheel'. The benefits of re-using such systems should be clearly explained to the concerned managements.
Most of these sound like the ideal world solutions to our problems. In the real world, I do see lots of other problems too:

  1. How do you deal with cases where a competing vendor joins the politics of the client organization and starts acting against us?
  2. Due to intra-departmental egos and problems, there are instances where no one in the client organization wants to take responsibilities for projects spanning such departments. In such cases, the vendor is left with no proper point of contact or line of control. This leads to insufficient requirements gathering, improper testing etc.
  3. There are situations where we know that the current design will cause major problems in future. But our engagement with the client is not established enough to take up or suggest a complete over-haul of their systems.
Many a time, it is the question of ‘who will bell the cat?’ And from the vendor side, this is where the skills of the onsite team are very important. It requires great skill to deal carefully with the different groups within the client setup and ensure that we do not antagonize any of them or be seen taking sides in their political games.

26 comments:

n@veen said...

Congratulations Vijay!..You are now ready for a 'Visiting Wisdom' lecture at SPJCM :P

Your post defly reminded me one of those IT consulting classes ....

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