Statistician defends his outsourcing figures

What about within their own organisations -- even to their own employees?
Companies take different strategies. The smart ones talk much more clearly about what is driving their strategy, why they are doing it, what jobs are going to be impacted, what jobs are not going to be impacted, and what they are doing to retrain the people who are impacted.

There is (also) a set of companies that I would put in the "ostrich" category. They hope by not talking about offshore, the whole issue will disappear. I think that is a strategy that is going to get them on the front page of their business section of their local papers sooner rather than later.

You might think it is the opposite there: if you are going to tell your employees what you are doing, they might leak news. But on the other hand, the employees are probably respecting you for doing that -- giving them a fair heads-up.

They are going to leak stuff either way. If you have an effective, articulated strategy and then [a] communication strategy around that, you are going to look a lot better when you talk to the press than when you are going to get five people talking about five different aspects of it.

I also want to ask you about a recent report from Boston Consulting Group that says the advantages will persist and may actually deepen with regard to going out and setting up a shop in lower-cost countries. In other words, it makes sense to be more aggressive in your offshoring strategy. Is that something that makes sense to you?
That may be the theory, but doing this well is extremely hard to do. My big concern is that companies are jumping on the kind of offshore-fad bandwagon with unrealistic expectations about how quickly they are going to be able to do it and what realistically they are going to be able to save.

Give me an example of the unrealistic expectations.
Most people do not do a good job of managing IT downstairs. You know, 50 percent of the projects are late, over-budget and underperforming.

That is just generally in the industry?
It's just generally, yeah. What makes them think that adding 10 and a half hours and 8,000 miles is suddenly going to be the silver bullet for those management processes? And then to make things really interesting, we are throwing a whole new culture (into) it.

Surveys that we do show that the No. 1 issue is lack of project management skills from the customer to manage the vendor.