Banking

When IT consultants should outsource work

Chip Camden outlines several instances in which outsourcing some of your IT consulting responsibilities might be good decision.

 Independent consultants have to get used to being responsible for every part of their business, or they won't stay in business long. Those who are really cut out for the job cherish their independence and take pride in their ability to do it all on their own. Perhaps they also have trouble trusting others to do the job right -- but that attitude can be taken to ridiculous extremes. Sometimes it makes more sense to let somebody else handle it.

As an extreme example, think about Internet access. We all use it, and we all rely on someone else to provide it: telephone, cable, or some other network company. Even if you have the technical expertise to build your own end-run around your ISP, it wouldn't make sense; you'd spend all your time insuring that your network was up, secure, and handling the load. So, instead of relieving yourself of the cost and frustration of working with the telephone company, you would have merely moved your costs and headaches around -- onto your own shoulders.

That's why programmers don't write their own compilers any more. Even those who do write compilers rely on other compilers that were written by somebody else.

If you're running your own business, you shouldn't be preparing your own tax returns, unless you're a tax accountant. Sure, you might be able to figure it out. You might even do a better job than an accountant would, but you'd have to spend a lot of time working on it -- time that you could have billed to clients or used to build your business. Someone who does tax returns all the time will charge you less than it would cost you to do it yourself (even if their fee makes you catch your breath) because when you're distracted with activities like that, you lose time, opportunity, and focus on your business.

The ideal geek hosts his or her own Web sites, but most of the real-life geeks I know use a hosting service instead. It makes sense to let someone else worry about the up time, connectivity, bandwidth, and security issues related to managing a server that faces the wide-open Web -- so we can worry about other things. I manage all the software and the content on my sites (I'm a software developer, that's what I do), but it could even be prudent to farm out some of that work as well.

A couple of days ago, my internal server's main hard drive crashed (no RAID, so it was down). In years past, I would have essentially lost a day because I would go out and get a new drive and then spend the rest of the day installing the OS and setting everything up again. But this time I had some urgent work to do that didn't require that server; yet, I knew I would need to have it back up real soon. So, I called a friend of mine who specializes in hardware and offers emergency services. He found a suitable drive at a great price and installed it for me, while I continued my work. What he charged me was more than made up for by the billable time I would have lost if I hadn't used his services. And because he knows hardware better than I do, I know it was done right. I felt that I lost geek cred for not doing my own repair, but it was the right thing to do.

What about outsourcing your work product?

As I said, I'm very skeptical of others' ability to execute what I want when I know what I'm doing, so I rarely subcontract. The times when it does make sense are when the expertise required for the work doesn't match my own -- on either side of equal. If it involves a technology with which I'm unfamiliar, it could be expeditious to bring in an expert in that field. Conversely, if the work is a simple task that only requires a lot of time, then a lower-cost alternative might be found in a junior colleague.

You have to be careful about outsourcing your work, though. First of all, a tax accountant may mess up your finances, but he won't damage your reputation -- outsourced work can. Second, bringing in more people may add more costs than just their compensation. You have to be able to manage the interactions, clarify misunderstandings, and avoid stepping on each other's work. It works best when the portion being outsourced is clearly separated and specified. Third, you need to make sure your client agrees to the arrangement; otherwise, you could have trouble collecting if anything isn't perfect.

In all of these scenarios, the question of when to outsource can be answered by one of the following reasons:

  • When it saves money. Assuming you have enough work to keep you busy, then if you can get someone else to do the task for less than your lost billable time, go for it. In that case, it isn't a question of "can I afford the luxury of having someone else do it?" but rather "can I afford the luxury of doing it myself?"
  • When it contributes to quality. If the person you can bring in provides beneficial expertise, then you can afford to pay them even more than your time is worth, because of the time you'll save not enduring a failure and/or fixing it later. Sometimes, just having another head dedicated to the problem can improve quality. But don't add too many.
  • When you don't have enough time. There's too much that needs to get done too soon, and the cost of waiting for part of it outweighs the cost of outsourcing. But again, be careful about assuming that two people can work faster than one -- it doesn't always work out that way.
These answers, in turn, boil down to one overarching reason: when it provides a better value. The key is to recognize that time is money and that lack of focus burns time. Employ others if they can help you to be productive at what you do best. Get weekly consulting tips in your inbox TechRepublic's IT Consultant newsletter, delivered each Monday, offers tips on how to attract customers, build your business, and increase your technical skills in order to get the job done. Automatically sign up today!

About

Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant b...

17 comments
reisen55
reisen55

This is a difficult question, for I have just taken on a Server 2008 install for a local company whose IT guru is out of the picture in a corporate job. If he cannot manage an outside business, he should not be doing it. Rule 1. But he remains their trusted source so I undertook this project from hell. Nice people, interesting technologies on-site. My first method was to follow their advice and dump the 2008 server into a 2003 domain and bring it up to speed, but there were issues there. My previous 2008 projects have involved the disengagement of a dead 2003 server, new domain, and station migration using a wonderful little utility by Forensit - called ProfWiz - to effortlessly pull stations out of one domain and into a new one with all rights carried over. Wonderful method. Works great. 5 min per station. Easy? WHOA - CORPORATE IT GURU went nuts, so I had to scrap hours of work and, yesterday, built it to his standards even though he is not onsite much and now he is claiming credit for work I did anyway. I am at the point of providing a final invoice and walking.

The article's main points make a lot of sense as long as you're talking about small projects. You are just unable to code all by yourself. Period. Any examples successful "one-man-made" projects? As projects grows it takes more and more business operations and marketing efforts from the owner. And you'd better outsource non-crucial development and concentrate on the core development. Thanks, Sasha Baksht, Techbridge.ca

Sterling chip Camden
Sterling chip Camden

How much of your business is done by you alone, and how much is outsourced? Any horror stories to share?

adeyemiadeoye13
adeyemiadeoye13

bad choice u did. The guy is a jerk for doing that. but if i was you i will go back to the office and i will tear down delete all the configuration. if they asked me to why i did that. i will explain to them point blank.

Sterling chip Camden
Sterling chip Camden

Instead of using the "Files and Settings Transfer Wizard", which doesn't get everything (Outlook profiles, Firefox settings, etc.). Does your tool copy those?

oldbaritone
oldbaritone

Let the guru have the credit. Consultants are often "whipping boys" for the Prince on the Pedestal. It's part of the role we play. When you make an employee look good, they call you again. And when they move on to a new company, they'll probably bring you along for the ride too. But don't forget - (I'm assuming) they paid you to do it the first time, then you got paid more to do-over the way the Prima Donna wanted it. When you're on salary, being expected to put in hundreds of hours of overtime without additional compensation, that's no fun. But when you're a consultant, if the specification changes, that's an "extra." Have fun, guru. Make all the changes you want. Cha-ching..... "illegitimi Non Carborundum Est"

Sterling chip Camden
Sterling chip Camden

... have been just me as the only coder. I rely on my clients to help with specification, testing, marketing, and support. Some of those projects have been quite large. So, yes, you're right that I couldn't have done the whole project by myself, but neither was there any reason to outsource any part of the actual development in those cases.

PMPsicle
PMPsicle

When you said the proper time to outsource is "when it provides a better value" you hit the nail almost on the head. The only caveat is you need to be able to afford it. Which, in this economy, is no small feat! And that leads me to question one restriction you mentioned. As an entrepreneur, you need to work yourself out of the business. As an entrepreneur you need to be concerned with working on your business (not in your business). Your target must always be to work towards the day when you aren't working in the business at all. That means EVERYTHING is up for grabs -- including the job you are doing currently. After all, how can you be 100% focused on making money when you're 90% focused on keeping your clients happy? As an owner/operator you make more money by increasing the number of hours you work. As an entrepreneur you make more money per hour by decreasing the number of hours you work (presuming constant sales & cost). Those reduced hours are where you can begin to generate higher profits. Glen Ford, PMP http://www.TrainingNOW.ca http://www.LearningCreators.com/blog/

reisen55
reisen55

He apologized on this and seems to be more a family friend of the place who pitched in an extra hand when the server exploded earlier this year. They do not have a dedicated IT guy per se............an opportunity. At any rate, I did server migration his route and it went smooth as silk.

reisen55
reisen55

In Camden NJ I had a decomissioned dead server and a new replacement with 20 old bad computers to pull out of the domain and put into the new one. ProfWiz is a local .exe run and just pulls EVERYTHING out, rights, printers, the lot. Took 5 min per station and also XMerge worked wonders in Outlook transfer as well. HIGHLY RECOMMEND IT. WWW.FORENSIT.COM

reisen55
reisen55

I have already banked several hours of work that proved to be scrap, and this is not a good situation for billing time. I am giving some back, but have devise a formula for some of it too. "There is no limit to what a man can do or where he can go if he doesn't mind who gets the credit." Raymond H. Eisenhardt Sr. (Not Ronald Reagan, nor Robert W. Woodruff of Coca Cola)

Sterling chip Camden
Sterling chip Camden

There's no question whether they pay for extra work. If you're on fixed price, you have to renegotiate the change, and argue about whether it was part of the original spec.

Sterling chip Camden
Sterling chip Camden

... that we like the work much more than running the business, so the idea of handing off all the work product to others so we can focus on the business makes us sad.

reisen55
reisen55

Security concerns, printers, access control features. My documents, favorites, etc. I do not want to create a batch file and I prefer not to do it manually. ProfWiz does it all for me.

adeyemiadeoye13
adeyemiadeoye13

u can create a batch file to move profile or do it manually.

PMPsicle
PMPsicle

Unfortunately, that's the trade we need to make when we "lose the boss". It's also why so many of us end up taking contracts that we shouldn't (as in bad for the career). And why even those of us who have "left" coding behind end up doing dumb jobs like web non-development (& even some web development) and fixing hardware. Sometimes it's because we secretly love that stuff ... and sometimes it's because we haven't spent enough time on our new job -- building the business.