To Outsource Or Not and the Impact on Employees

CIO magazine has done it again — two excellent articles on the topic of outsourcing.

One Outsources, The Other Doesn't” profiles two companies — Sears, Roebuck & Co. and Huntington National Bank — and the process their CIOs went through in making a determination about outsourcing. Along the way, author Stephanie Overby quotes consultants from META Group and Corbett & Associates as a reality check.

What I found particularly compelling was the description of the work each firm did with outside consultants to evaluate the projects and their internal IT organizations' abilities to meet the goals.

In “The Inner Cost of Outsourcing,” Ms. Overby interviews psychiatrist Mark Goulston, a sr. VP at business consultancy Sherwood Partners, on the impact of outsourcing on the mindset of staff. One interesting bit of insight:

I wouldn't tell employees what's going on until you've come up with an idea or solution for what you're going to be able to do for them so they can land relatively safety. A person's first question is never Why is this happening? but What is going to happen to me?

Although Mr. Goulston recommends honesty in addressing a company's plans to outsource, he also suggests pacing:

If the outsourcing rumors are unfounded, a CIO can firmly say they're unfounded. If the rumors are on target, what quells these situations are facts. But the facts you give have to be measured. You have to find out how much people want to hear so you don't overload them.

Alas, while the author brings up domestic outsourcing (“What should a CIO do in a situation where work is outsourced domestically?”), she doesn't ask the same questions on offshore outsourcing. That would have been a worthwhile follow-up.