Outsourcing
References Case
July 25, 1994
In that case, one of the bank's departments directed an outside consultant without any hands-on involvement, Cate says. The result: a slow and cumbersome system.
"Every time [someone] asked for more features, the consultant gave them what they wanted," Cate says. "It ended up costing a lot, plus the system eventually became unusable because it was bogged down with too many features."
Without some hands-on intervention, the loss of application quality and integrity is inevitable. But this can be easily avoided. "If you need to get up to speed on client/server technology, hiring a consultant makes sense," says Ed Aely, director of software research at International Data Corp. in Framingham, Mass. "But when you bring someone in for a project of any magnitude, the customer must stay in charge." set the project's objectives. Don't even call one until you have a clear idea of system requirements. And once development begins, a member of your technical staff should monitor its progress, frequently comparing it to initial specifications.
"If you let an outside consultant do the work for you, you still need to involve your people to make sure standards are adhered to and that the [project specifications] are interpreted properly," says Dick Lester, vice president of information systems at Associated Grocers, Inc. in Seattle.
Plus, your staff must know how the application is put together so they can make changes or solve problems later on. "No matter how good the outside contractor is, we need the knowledge to maintain whatever's built," Lester says. "That's why I think we're better off doing it ourselves.'
But that doesn't mean you should restrict yourself to in-house development or hiring past employees. "Client/server development is more complex than [development] for centralized systems, so ask for proof of [a consultant's] credentials," Acly says. "Check their references and make sure they've done a client/server project similar to yours."
And expect to pay for their services. In the mainframe arena, consultants usually receive $50 to $60 per hour, Acly says. In the client/server arena, rates run between $80 and $90 per hour.
Even so, Cate says he isn't opposed to hiring another consultant as long as the circumstances are different. For example, if a user had a very detailed project that would save money or reduce head count, and information systems didn't have the resources, Cate might recommend farming it out.
In such an instance, someone from the technology group would oversee the project. "At the very least, we'd assign someone from our group to sit in at all the meetings," Cate says. This person would also be responsible for testing everything, ensuring that users' requirements and bank standards were met.
"You can't say to [a user], 'Here's XYZ consultancy firm. They'll develop what you need,' " Cate says. "We've seen what can go wrong if someone from our staff isn't in control."
If you decide to go it alone, without experience in client/server technology, "expect to spend 50% or more time in development," Acly says. "If the project runs into trouble. it will also run into a lot of money.'
2. Sales/marketing
3. Financial/management reporting
4. Manufacturing/operations/production
5. Distribution
2. Human resources
3. Payroll
4. Order entry
5. Business modeling
But when making such a decision, intuition is your best resource, Atre says. intuition comes from experience. Good intuition comes from bad experiences," she says. So expect to make some mistakes along the way.