How to Outsource Without Alienating Staff

When outsourcing is the answer, what do you tell your staff? Here are some do’s and don’ts of outsourcing that can make it a win-win for everyone.

Mary E. Shacklett, President of Transworld Data

June 18, 2024

5 Min Read
Concept of global business outsourcing
Fanatic Studio via Alamy Stock

CIOs and IT leaders resort to outsourcing when they don’t have the internal expertise or bandwidth to take on certain tasks, but the message this sends to IT staff isn't always positive. 

Staff members can view outsourcing as a way to deprive them of the opportunity to develop new skills, when they believe they deserve a shot. In other cases, they see outsourcing as a threat to their jobs. 

Here are some do’s and don’ts of outsourcing that can make it a win-win for everyone. 

Outsourcing Do’s 

1. Outsource when you have absolutely no internal alternatives for doing the work, and the project deadline is too tight to allow for internal IT skills development. 

There are excellent cases for outsourcing. One is when you need skills right away for a project that can’t wait and there isn’t time to up-skill your staff for the project. Both staff and IT leaders will understand the practical need to outsource, and it will be especially well received if you let staff know upfront, and if you have a plan for up-skilling staff on new skills later so they can assume the continuing role in the project once it is installed. 

2. Outsource when the work is tedious and of long duration. 

If you have a conversion project where millions of lines of code and/or data items must be manually transformed because there isn’t the right transformation tool in the marketplace, it makes sense to offshore the work to a group that can handle these tedious and repetitive transformations that must be done “by hand.” Your IT staff will be able to continue more strategic projects, and they will thank you for taking this off their plate. 

Related:How to Manage a Rapidly Growing IT Team

3. Outsource if the company needs a new system and a turnkey system is the best choice.  

When a vendor delivers a turnkey system (e.g., CRM), the usual plan is to have the vendor continue to maintain and embellish that system. This makes the system an outsourced system. Buying turnkey systems and letting them function within the parameters of their best practices and functions is an IT practice that has worked for years.  

4. Outsource to a cloud vendor if you require more processing and storage for your application testing.  

Many commercial cloud vendors now offer on-demand storage, processing and configuration for testing applications. This is a great outsource opportunity that can save valuable time for your database administration and system support personnel, because they will no longer have to take time out of their schedules to set up application test environments for the applications group. 

Related:The AI Skills Gap and How to Address It

5. Always communicate to staff why you are outsourcing before you commit to an outsourcing arrangement. 

An outsourcing arrangement can scare your staff, who suddenly wonder about the safety of jobs and if the company plans at all to invest in internal employee skill building. By explaining to staff upfront why you want to outsource -- and what the long-term plan is once the outsourcing is complete -- you can ease anxieties and maintain your staff’s trust. 

Outsourcing Don’ts 

1. Don’t outsource if you don’t have a plan to develop internal experience. 

If you don’t invest in internal skills development, you will make yourself totally dependent upon the time and skills of your outside help. This is a risky position to be in. It also doesn’t ingratiate IT staff members, who probably believe that the company should be investing in internal skills training so they themselves can assume the projects that the original outsourcer took on. 

2. Don’t outsource if your outsourcer won’t deliver your source code. 

Your goal is to take over your code base once an outsourcer’s work is complete. To do this, you need source as well as object code. It is the source code that allows your staff to take over and maintain the code base once the outsourcer’s work is done. 

Related:IT Careers: Does Skills-Based Hiring Really Work?

3. Don’t outsource an entire system to a “turnkey” vendor unless the vendor commits to SLAs for system migrations to and from its platform. 

It’s never easy to migrate from one system to another. Always include a set of SLAs for all new vendors. The purpose of the SLAs is to commit vendors to meeting specific performance levels for migrations to their platforms and, if necessary, migrations off their platforms.  

4. Don’t outsource mission-critical applications. 

Companies should draw a line around their mission critical applications and maintain full control over them. This is a requisite risk management strategy because even if you host a mission critical application on a vendor’s cloud, there is no guarantee that the vendor won’t be acquired, merged or undergo management changes that could make a continuation of hosting difficult. 

5. Don’t outsource without communicating with staff first. 

I’ve seen IT environments where a decision has been made to outsource, the outsourcing begins, and the entire IT staff is caught off guard because no one ever told them that an entire system or project was going to be outsourced. 

In most cases, this happens because of under-communication from the CIO or project leads, and the long-term effect of it can be devastating. IT staff may begin to mistrust management and its ultimate motives. Key staff members might start leaving because they fear for their jobs. This can also lead to poor staff morale, because staff members see the outsourcer getting all the new and exciting work while they and their skills get left behind. 

About the Author(s)

Mary E. Shacklett

President of Transworld Data

Mary E. Shacklett is an internationally recognized technology commentator and President of Transworld Data, a marketing and technology services firm. Prior to founding her own company, she was Vice President of Product Research and Software Development for Summit Information Systems, a computer software company; and Vice President of Strategic Planning and Technology at FSI International, a multinational manufacturer in the semiconductor industry.

Mary has business experience in Europe, Japan, and the Pacific Rim. She has a BS degree from the University of Wisconsin and an MA from the University of Southern California, where she taught for several years. She is listed in Who's Who Worldwide and in Who's Who in the Computer Industry.

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