For the last decade outsourcing has gained and maintained a special status in western IT companies (even none IT resource intensive companies), outsourcing seemed to be the solution MBA power that be decided to be the universal solution that can fix anything. As they say for a man with a hammer every problem is a nail. IBM is taking it to the next level, through their Liquid program they are planning to assign work to freelancers registered on their website and charge them based on their work, day labor model similar to amazon’s mechanical turk service. Starting from their German operation – perhaps because of the strict labor laws there – and planning to spread it if it worked. I believe they are taking it too far.
Basically what they are doing is they are getting rid of all of their standing staff, all of the engineers and people with common skills that can be outsourced, and instead of using the current paradigm of finding a company willing to work as their proxy in their outsourcing destination of choice they are going directly to the engineer (hiring them day wage labor), which means they’d be able to cut costs through eliminating the man in the middle, also the cost of fringe benefits such as medical care, bonuses and promotions are all eliminated. I believe that this approach is unfair on so many different levels. Unfair direct competition and robbing employees from their benefits to name a few, not to mention the fact that most of these day employees wont be taxed by the countries they are in.
Weeks ago I posted an entry about
how MBAs are ruining the IT industry the impact of MBAs on the IT industry, the results are showing now. If this pick up it may end up killing innovation, for a simple reason, first of all you can never outsource innovation, however innovation is an organic process rather than a mechanical well regulated function, classically the innovation team members join from various functions of the company, each bringing a bit of his or her experience into the formula to cook that killer product that the company can later sell for loads of money. Lately and under the current outsourcing model, most of the engineers are dispersed around the globe, still some companies manage to assemble international innovation teams from their employees from various locations around the globe, usually moving them from outsourced employees to local ones. This is impossible to do under the Liquid model, if any of the day labors gets a brilliant innovative idea he’d most probably do it on his own, loyalty and commitment aren’t applicable here.
Loyalty is a key factor here, with the current model most employees are loyal to the company they are working in/with mainly because of little things such as not wanting to move his desk, lose his friends or do something other than what he’s been doing long enough to master, again with the Liquid model all of these little things that make all the difference seize to exist. As a technology consumer I hope this program fails, if it picks up, we consumers will be the first people to feel its impact with bland products that have zero creativity or love. As an engineer in this industry, I feel its unfair and borders being unethical.
Logging into wordpress today I found this little interesting banner asking me if I was an automatician, of course I couldn’t resist clicking it. As it turns out wordpress is doing a similar approach. Using their semi ubiquitous status to attract freelancers into enrolling into their global ranks, quite interesting. Ethically speaking its quite different, since they still can be passed off as a startup.