Hidden risk of outsourcing IT

There is a potentially undersold risk as a company considers outsourcing IT development or operations: The loss of internal productivity to mentor outsourcing consultants are often difficult to recuperate.

When we learn complex systems, our competence usually follows a Sigmoid curve (also known as “S-curve” or “Logistic curve”).

“Many natural processes, such as those of complex system learning curves, exhibit a progression from small beginnings that accelerates and approaches a climax over time.” (1)

sigmoid_curve

“In this case the improvement of proficiency starts slowly, then increases rapidly, and finally levels off.” (2)

When a company is looking to outsource the development or operations of proprietary complex IT systems, the consultants will usually follow this learning curve. But in order to eventually become productive, the consultant will rely on mentors to learn the ropes.

An internal competent developer or system administrator is assigned as a mentor to the external consultant. The mentor will experience a drop in productivity, and regain the productivity concurrent with the consultant.

Spreading the burden among several mentors may make the productivity loss less visible, but the combined loss of the mentors may even be greater.

According to a recent survey I did, the productivity loss of the mentor was at least 50%. The time needed from scratch to a fully productive developer was 24 months. The question is “How long would it take for the productivity of the consulatant to make up for the productivity loss of the mentor?”. Or in other words “How long until this scenario goes break-even?”.

To calculate this, we turn to the Sigmoid function:

sigmoid_function

Productivity of the consultant (p) is the Sigmoid function over time (t). We adopt the function to go from 0 to the time needed to become fully productive (T).

consultant

Then we adopt the function for the mentor’s productivity (P) starting from his dropped productivity and back to full productivity after T time. The drop (D) is the fraction of his full productivity (1).

mentor

The reason for the slight difference in the equations (the factors “7” and “8”) represents the fact that even after the time “T”, the consultant would on average still be a notch lower in productivity than the mentor.

The two curves combined with “T = 24″ and “D = 0.5″:

comparison_curves

The accumulated productivity of the consultant over time is the area under the blue curve, i.e. the integral of p(t).

consultant_integral

To get the accumulated loss of productivity of the mentor over time, P(t), we first invert the mentor’s productivity to get his productivity loss, Q(t).

mentor_inv

And the integral of Q(t).

mentor_inv_integral
The big question is “At what time (t) does the consultant’s productivity make up for the mentor’s lost productivity?”

comparison

With:

integral_indef

… we get:

comparison_integral

…which reduces to:

comparison_integral_red

Graphically represented:

comparison_integral_graph

The question is so big that WolframAlpha cannot display the numeric result within its standard computational time. But with the help of my trusted old HP-41 calculator, the answer was achieved: It takes 19 months of mentoring for the outsourcing project to break even.

The hidden risk is that if the consultant quits before that time, the outsourcing is a losing proposition.

So, if a company considers outsourcing IT to let’s say a Baltic company, one must be very certain that the turn-over of their consultants is above this break-even by a good margin.

The risk management: First figure out how long it usually takes a new employee in the company to get up to full production speed. Add some time if the consultant speaks a different language, is of a different culture and especially if the mentoring is done from a distance. This will be your “T” time.

Then, by a few short pilots, figure out the mentor’s productivity loss. This will be your drop “D”. Along with WolframAlpha and an HP-41, this is all you need to calculate the break-even for the outsourcing project. With the use of some employment statistics from the outsourcing company or the IT industry of that country, you will have a pretty clear picture of the risk involved.

One can, to some degree, mitigate this risk through effective Knowledge Management. A competent Knowledge Manager with an excellent company wiki solution and efficient training setups could shorten the time to break-even by perhaps 20%. Nevertheless, it’s a serious risk to consider – especially since tacit knowledge from years of experience in the company is hard to transfer. Add to this the risk of the mentor quitting or is put on other tasks. Thus the consultant’s stay should exceed “T” with a good margin.

Update (2015-01-18)

An approximation formula will suffice for quick gain/loss calculations. This formula gives the net gain (if positive) or loss (if negative) for any given time (“t”):

gain_loss_simplified

In search for perfection (yeah, tech stuff)

Only a short while after having settled with dwb as my browser of choice, it was announced that it was unmaintained. Development had stopped and it was left in limbo. Again I was out hunting for The Browser. Revisiting Luakit and Uzbl, I discovered Vimb that seemed promising – but it had a few snags that ended up prolonging my quest. I hang around in the IRC chat channels of several tech projects, including a handful browsers. Got chatting with the main developer (“The Compiler”) of a new browser on the block just before X-mas – and it turned out that his qutebrowser served well as a Christmas present.

Qutebrowser uses a different underlying technology (QtWebKit), written in Python, has a very clean configuration, extensible and actively maintained.

It still lacks a few features like a form filler, session management and support for AdBlocks “easylist” (although it has a more rudimentary adblocker). But these are on the roadmap, and with the pace of development, I am sure these and many other neat features are not far away.

One thing that bugged me was how QtWebKit rendered fonts. Fonts were noticeably slimmer rendering web pages less readable. After some hours of tinkering, I solved the issue by first getting a better font setup for my system (here), then installing the Ubuntu package called “texlive-fonts-extra” and setting the font “Lato Heavy” for the following font settings in qutebrowser: “web-family-standard”, “web-family-serif”, “web-family-sans-serif”, “web-family-cursive” and “web-family-fantasy” (and the font “Droid Sans Mono” for “web-family-fixed”). Now fonts are beautiful and very readable.

After wading through more than a dozen browsers, qutebrowser fits the bill quite nicely.

And when I thought I couldn’t get closer to Nerdvana

… doors started to open.

I have written about my technical setup before. But now, ladies and gentlemen, it is getting HOT. Like hard core porn hot.

The setup goes like this: Linux (Ubuntu 14.04) as the operating system (easy package management – it does the job well). No kludgey memory-hogging desktop environment, just a damn good Window Manager straight – the i3. Lean, mean, keyboard driven and very efficient. Check out my config here.

The i3 window manager in action

The i3 window manager in action

Adding a conky bar with essential info at the top of the screen. And the perfect e-mail setup for good measure.

The e-mail client, mutt

The e-mail client, mutt

I am a vi-guy to the core, and I prefer to use console tools as much as I can (urxvt is the terminal with zsh as the shell). With key bindings for everything and with minimal use of the mouse, I get the speed and efficiency I want.

I use VIM for almost all my text editing – from writing books and articles (with the added benefit of LaTeX) to writing hyperlists, all my e-mails… and this very blog post. I swear by mutt as the e-mail client. It spawns vim as the editor. Essential vim plugins are netdict, visincr and gundo.

Newsbeuter - the rss reader

Newsbeuter – the rss reader

I use newsbeuter for newsfeeds, irssi as the Internet Relay Chat client and mcabber for my facebook chat :-) Zathura is the pdf reader of choice.

Using irssi to chat

Using irssi to chat

Just the other day, as I was struggling with a bug in the latest release of the trust old vifm console file manager, I came across an alternative – ranger. An ultra-neat file manager capable of all sorts of acrobatics – like displaying images right in the console (via w3m)! Wanna dig in? My config file should get you grooved in.

The amazing ranger - file manager on steroids

The amazing ranger – file manager on steroids

Then it’s the browser. I have been very happy with uzbl – until the latest git updates. Stability issues started creeping in and I was forced to look for alternatives. I have tried plenty – and I gave luakit another go. The config files are written directly in the programming language of lua. A bit of steep curve for simple configuration tasks but as you get used to lua, it offers amazing extensibility to the browser. As I started to fell in love with luakit, another vi-like browser popped up on the radar – dwb. How could I have missed this gem in all my trails and tribulations trying to find the perfect keyboard driven browser? OMG what a browser! Don’t leave home without it. With such an easy configuration, you’ll be up and running and turning into a fan in no time.

Dwb - über-cool browser

Dwb – über-cool browser

I have spent 14 years choosing my tools, fine tuning their operations and polishing every detail. I owe much work efficiency to this passion.

When I thought I couldn’t get closer to Nerdvana, I stumbled right into its core. Sadly, I now have few ideas left of how to improve my tools set :-/

dwb

The case against patents

Thomas Jefferson once said:

Accordingly, it is a fact, as far as I am informed, that England was, until we copied her, the only country on earth which ever, by a general law, gave a legal right to the exclusive use of an idea. In some other countries it is sometimes done, in a great case, and by a special and personal act, but, generally speaking, other nations have thought that these monopolies produce more embarrassment than advantage to society; and it may be observed that the nations which refuse monopolies of invention, are as fruitful as England in new and useful devices.

Copyleft-All-wrongs-reserved

And the debate on patents are more relevant than ever. Big companies suing each other for billions has become commonplace. Collecting patents to fuel an arsenal of defensive legal leverage, tip-toeing the mine field of patents when trying to invent something new, using patents to stifle competition rather than innovate, forging patents alliances that centralizes power and keeps the smaller players off the playing field. The list goes on. And the net value is hardly innovation incentive.

I want to bring to your attention an article that details the economic effects of patents (link to the full article). The abstract reads:

The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity. Both theory and evidence suggest that while patents can have a partial equilibrium effect of improving incentives to invent, the general equilibrium effect on innovation can be negative. A properly designed patent system might serve to increase innovation at a certain time and place. Unfortunately, the political economy of government-operated patent systems indicates that such systems are susceptible to pressures that cause the ill effects of patents to grow over time. Our preferred policy solution is to abolish patents entirely and to find other legislative instruments, less open to lobbying and rent seeking, to foster innovation when there is clear evidence that laissez-faire undersupplies it. However, if that policy change seems too large to swallow, we discuss in the conclusion a set of partial reforms that could be implemented.

The article is an excellent read and complements the book, “Against Intellectual Monopoly“.

Also check out Johanna Blakley’s neat TED talk on the same:

Planning: Trading predictability for intelligence

I spent hours meticulously drawing an old castle, three levels of floor plans and carefully populating every room with Orcs, Trolls, Undeads and treasure. But even more hours was invested in planning how the players would approach the castle with their Role-Playing characters. The front doors would be unlocked and the characters would discover that, sneak inside, engage in a small fight with two filthy Orcs playing dice instead of guarding the castle, commence to the guard room, find a treasure, get surprised by a lutenant Orc walking into the room, etc. The plan was a masterpiece, but upon reaching the castle, I was taken completely off guard. They walked around to the back side, got out a grappling hook and climbed in through a small kitchen window on the second floor and… completely wrecked my plan! Dang! I hated unpredictable players.

castle

The purpose of planning is to increase predictability. Regardless of the name and the scope – strategy, plan, tactic, game-plan – the purpose is to avoid unpredictability. With the knowledge of Now, one seeks to make decisions into the future. The aim is to focus effort and to limit dispersement.

Sounds all good, perhaps. But there is a flip-side to this coin. When one focuses, one also limits and excludes.

planning

In opting for predictability, you trade in intelligence, creativity and agility. By limiting future choices, you limit improvisation and potential genius. This is why most creative geniuses prefer not to work in large corporations or set structures, but rather in lean and mean startups or prefer to work on their own.

What you gain in focus and stability and predictability in the short run, you lose in attainment of long-term valuable skills.

To quote Ole Wiik, “one must practice what one wants to be good at”. As you focus your training in one area, you become less adept in other areas. Planning makes you better at planning. But it makes you less adept at improvising. By avoiding the unpredictable, you will never get good at tackling the unpredictable. Your mental dexterity will suffer proportionately with your increasing planning skills.

Another factor to consider is that decisions are always sharpest with the best and up-to-date data readily at hand. Thus, any decision made by planning, decisions into the future can never be potentially as good as a decision made in the Here and Now with fresh data and input. Limiting mental dexterity by planning and adding some blinders will make you less sharp mentally. Planning adds preferences, it adds filter that makes fresh input looks dimmer while you become dumber. In an interview with Chess.com, Magnus Carlsen said: “Having preferences means having weaknesses.”

planning2

Planning is a tool, a crutch. It enforces a view of the future based on today’s data. It stimulates preconceived ideas, adds a filter for new data, tend to help you avoid unpredictability and helps you never get good at tackling surprises. Tools and crutches are needed if you cannot cope with a situation without them. But right there it should make the alarm bells go off. Instead of getting addicted to the tool of planning, how about starting to practice tackling the unpredictable? Scary shit. I know. But it does add spice to life and skills to you.

planning-planning-unemployment-obama-demotivational-poster-1244320193

sharp

The cult of ITIL

ITIL is the major framework for IT Service Management.

ITIL-V3

It comprises 5 books of Shakespearian English flanked by huge amounts of models, figures and diagrams. It is unwieldy and complex, leaving the reader in awe of its awesome.

chart-itil-v3-v1.9

ITIL has thousands of followers organized in country chapters of the IT Service Management Forum. Piles of papers are written every year, ITIL projects abound, and it remains a huge industry with vendors eager to leech off the ignorance of customers. And while organizations experience real IT challenges, they all too often jump to the conclusion that ITIL is the savior.

  • Problem with Peter.. Peter will not take responsibility? Enforce ITIL!
  • Trevor and Jack won’t work together? Go for ITIL!
  • Lack of IT documentation? ITIL!
  • Sandra shows lack of motivation? ITIL!!
  • Ben is a horrible manager? ITIL!!!

The less passionate employees are about their job, the less they feel a strong purpose, the less they take responsibility, the more ITIL seems required.

The ITIL congregation knows that it has the ultimate solution to every issue facing an IT organization. ITIL is the answer. Never mind the question. Bring out the Powerpoints and hard hitting argument. Oversell like mad and brainwash the customer into a true ITIL believer. The cult of ITIL rolls on in the all to recognizable self-serving fashion.

Sounds like Scientology, doesn’t it?

While the differences are obvious, the similarities are striking. Method before result. The tool becomes more important than the objective.

ITIL has been around since the early 90’s. My experience dates back to the early 2000’s. I used to be an ITIL evangelist, but the glare and glitter wore off along with my many ITIL projects. I did several high profile and very successful projects, but they often succeeded despite of ITIL rather than because of it.

Few ITIL projects succeed in making customers happy. Most fail due to some serious faults in the very foundations of the framework. Like the responsibility model, the complexity of the framework, the lack of true customer focus, the lack of real service focus, the lack of people focus. And above all, the belief that a certain method yields a certain result when the input is unknown. One should be very careful trying to implement a mindset of industrialization in the human spheres. What works splendid in a factory may wreck havoc on human initiative, creativity and motivation.

It is more important to help and motivate people than to enforce tools, processes, methods. The belief in the superior process rather than the superior will to deliver excellent results is the hallmark of a failed ITIL project.

People matters. More than the rest.

This is not to say that ITIL doesn’t have some excellent tools and tips. ITIL is good at describing the playing field and different typical
positions for people to play. It points to some good practices in dealing with IT issues, incoming requests, changes to systems that affect many, etc. But as with Scientology, one has to tread carefully in a minefield and wade through some rubbish to get to the good bits. As Scientology fosters a culture of irresponsibility, ITIL tends to do the same. Not by teaching irresponsibility per se, but by focusing so much on everything else as to leave little room for real empowerment and create a culture of self-thinking, responsible people with initiative and guts.

ITIL purports itself as “Best Practice“, but I was there when Sharon Taylor, the Chief Architect for ITIL version 3, said that the framework contains about 60% Best Practice and some 40% Wishful Thinking.

The best that Best Practice can do is to create followers. Leaders innovate, tread new ground and through guts and allowing themselves to fail come up with ingenious ways of doing things even better. Broad ideas and principles may be great guidelines, but when a framework becomes too detailed, it looses its punch and becomes a one-size-fits-few.

ITIL has created hoards of followers. Resembling a cult. But we don’t need cults. Rather than producing followers, one should strive to make everyone a leader in his own work area – even if the person leads only himself to deliver great results.

A few days ago I came across a blog post that was distributed by the LinkedIn news feed titled, “Top 5 ITSM Tips for 2014“. It reads like a gust from the past and serves well to underline what I wrote above. Tip #1 “Cost-effectively implement best practice ITSM” starts off with a whiff of fluffy business English:

Implementing best-practice IT service management not only ensures you are improving customer satisfaction and relationships with better reliability and quality of service, it will also give your service desk a competitive advantage.

Say what? Implementing this will ensure customer satisfaction? The answer is given. Don’t mind asking the customer. Maybe they don’t need anything even resembling ITIL. Maybe they don’t even need an IT department. Maybe they just need more care from the IT staff. Maybe something else entirely.

I don’t think the health profession was ever as narrow minded as this. Enter the doctor’s office. He has already decided what you need. Without even a second of examination. “You sir, is in dire need of an appendectomy!”

The article goes on with tip #2, “Measure your success”. Now this sounds very good. Except:

Measuring the success of your IT service desk will become ever more crucial as senior management hone down on overspending and look at ways to cut costs.”

The IT service desk… What if the customer got such amazing IT that a service desk was hardly ever needed? How about instead asking the customers what they think about the IT services and measure that instead?

Then tip #3 reads “Manage ITIL like never before”. So, instead of managing customers, and IT staff, we are lead to believe that ITIL is something to manage. Actually, it is the thing to manage. You don’t really manage ITIL or even processes. It’s like stating that the soccer manager should manage ball passing like never before. Nope. Manage the players like there was no tomorrow.

“Deal with the increased demand for accelerated delivery” is tip #4. Sound advice as long as your customers needs are assessed and as long as you are not relying on rubber stamp conclusions from analysts. Your customers matters. More than Gartner statistics.

And finally, the sales pitch for the ITIL certification industry: “Qualify your team”. If that would only advise the reader to qualify your team toward what your customers really need. But no, it means getting your staff through multiple choice questionnaires to pass a theoretical exam. A great exercise to produce followers. A louse exercise to enable IT staff to handle customers better.

The article manages to miss the major point in making IT successful – that what is really needed is motivated people that take 100% responsibility for delivering amazing service to their customers. The area of IT thrives through creative genius, people with heart, people who give it all to deliver excellent products and services, interested staff, real and honest communication and people with guts.

ITIL is traditionally very introverted. Not surprising given it’s a framework for an industry overrepresented with people having a hard time picking up girls. More extroverted contributors have come on board in recent years, but as the framework piles on with complexity, it still suffers from the internal focus.

To enhance IT, we need to inspire dedicated customer focus and a culture marked by 100% responsibility.

Get to the bottom of it!

The insistence on finding the WHY is pervasive. Psychoanalysis. Dianetics and Scientology. ITIL and Root Cause Analysis. The belief that one has to get to the bottom of a problem can be blinding. Because it is far from the only way to solve problems. Sometimes it is better to evade the problem, to find another path or to stop creating the problem altogether.

If you face a difficult situation or problem in life, do you need to find the cause of the problem to solve it? Perhaps. Or perhaps not. It depends. There is no ultimate answer to such a question. Maybe you need what you ultimately think you need in order to solve it.

If your car breaks down, smoke and fire erupting from the engine, do you need to find out why the engine broke down? Not if it is an old wreck of a car. It would be cheaper to buy a new one. And not if it is cheaper to replace the engine than spend much time investigating the source of the engine trouble. It all depends. On the business case. Maybe it was an omen that you should start get in shape by riding your bike more often.

The insistence that one must get to the bottom of it can create tunnel vision and lead to endless hours of therapy or auditing or figure-figure why it is this way or that way. At least sometimes it’s better to just give a fuck.