Thoughts on SAP Outsourcing, Part 2 – the Devil’s Polygon

Now that I have walked down the memory lane, this time around let me share some thoughts on what earned outsourcing a bit of bad reputation. Again, this is all just my personal view and not that of past or present employers. Outsourcing is not a perfect world at all – and the ill will it generates can be attributed to a devil’s polygon ( taking a  clue from my friend Mike Krigsman  who is famous for Devil’s triangle). Many players are involved and they all have different POVs.  Since I have not worked from the customer side – I don’t claim to be totally objective in my thoughts. But for what it is worth, here you go.

1. Pushing people through the career hierarchy before they had a chance to make mistakes and learn at the lower rungs is a common scenario in this high demand market. If a developer makes a mistake, it can usually be corrected without too much trouble. And then the developer learns what not to do, how to react when things go wrong, how to explain to client and management etc while limiting the risk. If this developer became a team lead or a PM too quickly, and goes through the learning process with errors at that level – chances are it won’t end well. Bad managers are the biggest reason in my opinion on why outsourcing earned criticism.

2. Lack of understanding from customers on what they bought, also ranks up there on top. Before outsourcing, a customer would have had an inhouse team doing everything. And since the IT team sits next door and goes to lunch a beers with you, there is generally a good camaraderie. If you make a call to your friend and ask her to add a field to a report, she will probably oblige occasionally without a formal process. She might also offer some support over phone if it is not in office hours for sake of friendship. When outsourcing happens – you are already stressed out that your friend is not in that job anymore, and you need to follow a rigid process to get things done. No one told you that for cost reasons, your management only bought 8 hours of a day of support. So when that last minute change is needed on Friday at 4 PM, chances are that it won’t get done before you go home.

The funny part is that the same people as consumers are totally fine if this happens to them with say a cell phone company. You raise a ticket, wait for it to be fixed and you cannot call for updates every minute. For days at length, you will be forced to see “in progress” as status on their website. Yet we get stressed out if the same thing happens when our own employers outsourced to another provider.

My biggest gripe with how companies buy outsourcing services is the lack of due diligence on customer’s part on what they need to buy to do business as usual. If the service provider tries to educate the customer – more often than not, it will be percieved as “hard selling”.  I am not letting the outsourcing companies off the hook either – they need to better explain what is in the basket and what is not.

3. Economic differences are a big contributor  too. When USA and Europe are going through a bad economy, and we lose jobs to Asian countries – we of course will feel bad. What we occasionally forget is that it is a direct result of how capitalism encourages competition. If local workforce can come up with a model where they can be competitive, there is a fair chance that a lot of these jobs will stay here. We cannot take a stance that “I will continue to do what I have done all my life, and I expect to get same or better pay, and I will refuse to believe my skills have become commoditized.”. Apples to Apples – it will be difficult for a person in US to compete on a wage basis to a person in India or China. However, if the game is changed – say the person in US can form a team that supports multiple clients, and provide better service – there is no reason why this should not work out well.

4. Social differences are better now from the time I started in SAP area. I have sat in many meetings in my first few years in America and Europe and listened first hand to “oh this is not complex, we can probably throw it to the Indians” and “they are just ABAPers” and “do you go to office in India on horseback?” and many others that were so rude, that I cannot bring myself to write it here. It took a few years for me and many other colleagues from India to feel that we are part of the team too. This has vastly improved with time. When you feel crappy on the social side, it is pretty hard to concentrate on work fully. Although I felt terrible at the time , I also realized later that my American and European colleagues and clients were not trying to be intentionally rude. They had never been to India before, and they found it incredibly hard to understand my thick accent and long name. They also did not know why their employers got Indians to join the team in the first place. A lot of this frustration on both sides could have been eliminated or at least reduced if outsourcing companies and clients who bought their services communicated the plan clearly and did so right upfront, and not after every one got wound up.

I will also tell you a rather funny story. A good friend of mine – also an ABAPer from India – started in US working for a client of mine. I was working in a US based big SI, and he for an Indian firm. Client used to treat consultants from my employer kind of on par with their own staff, and we would get invited to nice dinners and ball games and so on. My friend on the other hand never got this opportunity, and did not know this was going on. A year later, he joined my employer and started seeing the difference in how he was treated by the client. And when we went live, the development lead from the client congratulated my friend saying “this guy from so and so company wrote a brilliant application, and our users love it. It totally validated my reason of hiring this SI to help us be successful”. We all cheered big time, but the funny part is that this terrific app was written by my friend way before he joined my employer. He never told the client manager, but till date – every time I talk to him, we joke about this.

5. In a dog-eat-dog world, people snipe quickly to protect turf. Having worked for very small and extremely big employers, I can say with some confidence that neither side has earned the right of  “holier than thou” . I have been sent in to rescue projects screwed up by cowboy developers from small SIs or independents . I have also worked in very small shops where we were appalled by the work done by the SI who put in the SAP solution. In general – big SIs get more of a bad reputation in these cases because they have a recognized brand. People who are independent now or work for small shops – most of them had a history of working at a larger shop before where they gained experience and became the big expert. So it is not as if when they moved out, the past shop became pretty bad. People and companies protect turf – and customers know that only too well by now.

6. People forget that SAP product was not this mature in the mid 90’s. A lot of work that looks terrible when we look back were clever work arounds that were done to make SAP work on those releases. When such a system gets outsourced for support, and complex problems arise – they might not have elegant solutions. Short of reimplementing SAP, usually the only way is to apply even more band aids. But when this is looked up on from outside, it looks terrible and the fault is attributed immediately to poor skills of the people supporting it.

7. The factory model used by many outsourcing companies get a lot of flak – usually from people who do not have the ability or scale to do that. Factory model works – if it did not, many big businesses would have closed shop by now. Obviously, this model needs a revamp since the model has not kept up with advances in technology, especially on infrastructure side. The reason it still survives is because – despite all that is bad with it, it gets the job done cheaper in most cases (when it does not for a few cases, it gets more bad press than the many times it works). Factory model works only if it is implemented properly, with the associated change management. In several cases, the change management gets kicked to the curbside, and then it goes downhill pretty quickly. If all parties know how the model is supposed to work, and commit to it – it works like a charm. When you skimp on some parts, it fails. Outsourcing companies and clients need to do a better job in change management, and educating the clients and their own staff onsite on what it takes to get it done successfully.

8. Talent retention is an issue for customers as well as outsourcing companies. However, outsourcing companies have scale in their favor. This is their bread and butter business and they have a better ability of sourcing and retaining talent. However, there are things that are not in anyone’s control – like the current restrictions on work visas in US. A lot of plans that were put in place long term for outsourcing projects, now need to be revisited, and I expect some outsourcing horror stories to surface. From the perspective of local work force, this is great – because it provides a window of opportunity to get good jobs. The current demand and supply situation is kind of weird – there are lot of unfilled seats in technology jobs, and there aren’t enough skilled people to take it. This skill mismatch is a deeper problem that needs a re-engineering of fundamental aspects like education reform etc. It will take time to fix.

9. As an inhouse expert in SAP – it is pretty common that employees gain exposure to multiple skills. I have many friends who can do ABAP and SD configuration and BW. This is not a model that outsourcing companies have actively worked on in my experience. In traditional outsourcing models, due to price, nature of work etc – ABAPers generally do only ABAP, and BW folks only do BW and so on.  A small percentage will get cross trained , but they are the exception. However, this part does not get recognized when these people are pulled into outsourcing projects. I have heard hundreds of requests from customers on “why can’t you find me an SD consultant who can also do BW reporting? Joe , who used to work here, could do all of that plus some ABAP” .  It is not easy to find a like-for-like replacement for Joe at the price a customer is willing to pay for that service.

10. The most common complaint you would hear probably is “these people are still stuck in ancient ABAP coding ways. They don’t do OO ABAP, they don’t know what web services are…are they living in a cave?”.  Most outsourcing shops – atleast the good ones – have good training programs that train people in latest and greatest technologies. However, not everyone is sent for that training. It is expensive to train people, and companies won’t invest in training tens of thousands of people unless they see a demand for the specific skill, and a premium for it. SAP is generally very backward compatible  – so several customers have decided to just move on with that is already built, and just “keep the lights on”.  They will try new things for new projects – but are generally hesitant to fix existing ones. As a result, the people supporting these projects have to remain in the old way of doing things. We should also understand that in most cases – time to develop a solution trumps everything else.  So if there is a bug in a program, the biggest requirement is to fix it and get it back to working state. In the hurry to fix it, more band aids get applied.  Unless a customer is willing to spend money on cleaning up existing mess, this problem will only continue to get worse.  In current economic scenario – I doubt how many will open their wallets to do that in near future.

It is hard to keep this series in a structured format with so many things rushing to my mind. But I will try my best to get it more organized as I move forward. I am typing this from the plane on my way to work, and lack of good coffee has to take some blame for my random thoughts too 🙂