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Outsourcing

Kathryn Cave (Global) - Are Faulty Boeings Down to Tech Outsourcing?

At the start of January, the battery pack of a Boeing 787 caught fire on the ground at Boston's Logan International Airport and firemen took 40 minutes to extinguish the flames. From there Boeing's problems seemed to go from bad to worse: two weeks later a flight was forced to make an emergency landing in western Japan (battery problems again). Then United Airlines was compelled to delay new services between San Francisco - Paris and San Francisco - Taipei, as the planes intended for these routes were needed to replace faulty aircraft. The upshot is now Japan's All Nippon Airways (the plane's biggest customer to date), has cancelled over 3,600 flights.

In response to this, ‘the Engineer' ran a straw poll on its website - results published yesterday - that looked at reasons for these problems. This revealed that 35% of respondents (overall) blamed IT outsourcing in one way or another. The highest single reason suggested (with 38% of votes) was that ‘safety testing regimes should be more stringent' - which makes sense, but interestingly, 17% thought there should be ‘increased due diligence in the choice of outsourcing suppliers' whilst 18% thought ‘as much technology development as possible should be brought in house'. Both these reasons firmly place the blame at the feet of outsourcers.

Obviously this is only an aggregation of opinion, but perhaps it is significant? Partly because outsourcing is not the first place most people's minds would go when it comes to faulty vehicles, but also because outsourcing itself is becoming so prevalent. Deloitte's Global Outsourcing and Insourcing Survey last year, for example, reached the conclusion that outsourcing is ‘continuing to become mainstream.' On top of which, Paul McDougall explained recently in ‘Information Week' that outsourcing is here to stay due to cost savings, skills gaps, visa shortages, 24/7 global hours and the cloud.

Irrespective of the fortunes of the Boeing 787 (or the perceived moral value in sending work to be completed elsewhere at a cheaper rate), the ripple effect of outsourcing can now be felt across the board. The case of the bloke who outsourced (or more accurately, offshored) his own job to someone in China is perhaps the best example. According to the Verizon case study pulled together around this, Bob "spent less than one fifth of his six-figure salary for a Chinese firm to do his job for him." And his ruse was only detected due to perceived anomalies in the VPN. More gallingly (or impressively depending on your perspective) his annual performance reviews consistently rated him as the best developer in the company.

However, the real challenge with outsourcing is surely managing the external resource? Maybe Bob was a terrible developer but fantastic middle manager, because outsourced suppliers (of any kind) can never be better than the information provided by the company itself. This makes the opinions in ‘the Engineer' survey especially revealing. Would bringing procedures in house really make any difference? Whether the work is outsourced or not there must (surely) be a company representative monitoring the process? The same is true of the due diligence required to select a supplier.

I can't help wondering if a tendency to distrust outsourcing ultimately comes down to the fear of the outsider, and a natural human concern by employees for their own jobs? The news is consistently full of stories about the impact of globalisation, transnationals and the ‘hollowing out' of the middle class, which can only bring an air of uncertainty to a lot of professionals. Perhaps the unlikely takeaway from the Boeing case is a desperate need for more middle management - the most denigrated group of all? Or maybe the safety testers at Boeing were all just outsourcing their own jobs to not very good professionals in China...

 

Kathryn Cave is Editor at IDG Connect

 

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