JG Letter On IT Outsourcing
Posted by Jeff Pruitt - 6/6/08 @ 4:19 pm - Filed Under City Council, Local Politics
The JG has a letter-to-the-editor in today’s paper about the city’s decision to outsource its information technology work. The letter is by John Colgate and was first written as a comment right here at FWP. I wanted to reprint it as it’s own thread for everyone to read in case you missed it the first time around:
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It is interesting to read and hear the elected and appointed officials as they try so hard to justify the spending of millions of our tax dollars. Either with a company from France, a country that looks forward to getting billions from the U.S. Air Force at a loss of about 10,000 American jobs, or a company from India whose Chairman brags about doing business with a Communist Chinese city.
Where do our elected representatives have their heads buried? Or, what do they have to gain personally from this outsourcing? History should have taught us a number of lessons by now. Among them are:
You only get what you pay for. If these companies under bid ACS by a substantial amount, how do they propose to provide equal service let alone more and better service?
When you outsource critical information (tax, financial, infrastructure, security data), the more leaks you develop in securing that data. The Pentagon is suffering some 30,000 attacks on their computers every day. And they do NOT outsource their data! Chinese officials are so intent on collecting information the State Department is warning visitors to the Olympics their hotel rooms may be “bugged”. And any government traveler overseas must have their laptops “sanitized” when the return to the U.S. To avoid implanted “bugs” from spreading.
When you deal with an “Off Shore” company your ability to enforce contract agreements is directly proportional to the distance between the “company” and the “customer”. Most times any stated savings is paid in fees to lawyers.
Promises to “keep many of the old employees” mean one of two things. Those who are kept are offered much lower wages (remember that “low bid” thing?) Or, the promise is just to shut up the media questions. The current employees are being told they “will have to re-interview” for any jobs and that “there is no assurance a job will be available”.
Appointed managers may have a motive for choosing a particular company or companies. Much like those federal appointees that land “sweet” jobs later on with companies they did business with earlier. Or, they may get tax paid vacations for regular meetings with company officials in far away places.
These are just a few of the lessons history keeps attempting to teach. For some yet unknown reason, those folks we elect just seem to be immune from learning from them. With the logic they display, let’s see how much we can truly save. Let’s “off shore” all our services. Why do we need a Mayor that lives in America? Couldn’t a City Council or County Commissioners in a third world country do just as well as what we now have?
We may find the so called savings in this deal may be a considerable amount less that the “bean counters” brag about. I seriously hope the voters remember those people that suggested how much the taxpayer would save by contracting with an “off shore” company. When their jobs are taken and their companies gone, will they pat themselves on the back and brag about their decisions?
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11 Responses to “JG Letter On IT Outsourcing”
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Regarding the commentary that “You only get what you pay for.”
I worked for ACS as a contractor and can tell you that from my experience, ACS operates in reaction mode. They wait for something to break, ask how it should be fixed, spend months sitting on the solution and then deliver something that doesn’t work. They are not proactive by any means.
Their lack of activity costs the city and county hundreds of thousands of dollars a year in operating costs. Employee morale was also a huge issue while I was there. Management uses threats to keep their temps and employees in line and if you make a suggestion that might increase productivity you get fired on the spot.
I also find it interesting the author of the editorial happens to have the same last name of the security director for ACS…. Coincidence?
You get what you pay for? What if you pay for it and get nothing? It is sad that they have to get a company from France or India, but it is ACS’s own fault, they could have saved their ship long ago by just doing their job.
I applaud Clifford and crew for making this move. They have the city and county’s best interest in mind and will see only a positive outcome.
-D3-
As far as getting what you pay for…
Based on the RFP, it appears the City and County were operating on a simple maintenance contract. For those outside of the IT world, its a “keep it running” contract not really a “make it better” contract. Quoted directly from the RFP: “but in general, the City/County’s agreement [with ACS] is designed to perform ongoing operations”. This is not an improvement based operation, so when the City and County states ACS was not providing the services it desires, that doesn’t mean they were contractually obligated to.
I think it is important to remember, this is not simply an issue of ACS losing out on a contract. I don’t have first hand knowledge of their activities and maybe they aren’t the best fit for the City/County maybe they are, I can’t say. However, what really should be the concern for the public is the security aspect of a possible foreign vendor. The systems operated by the City and County contain huge amounts of information. Do we really want this information to be under the control of an overseas company? The Police/LE system (which I’m sure has plenty of personal information)? Access to the files that outline our Emergency Management/Homeland Security procedures? Health Department Records?
I don’t believe that we need to overlook security to see a better bottom line.
If you look at the current ACS contract, they have delivered above and beyond what the City and County are paying for. Unfortunately, the rhetoric posted by D3 sounds like it came from a disgruntled employee. ACS does not manage IT for the City and County in the normal sense of that term. They take the requests from the City and County and try to deliver with little or no additiional resources or monies. I am glad that D3 “applaud Clifford and crew for making this move.” Unfortunately, D3, the City and County, and the tax payers will find out the grass is not greener on the other side. I frequently forecast technology impacts and projects. I will make a prediction here. The new company will come in and stick to the letter of their contract. The City and County, in their typical nonchalant attitude will not review the new contract very well. The new vendor will come in and give them exactly what they agreed to in the contract. In the City and County’s short sightedness, this will not be very specific. The users will then suffer due to a lack of diligence in this procurement process, which will mean the citizens will also suffer. The contract will cost at least 50% more then the original proposal, due to the City and County not reviewing the contract properly. They will also hire internal IT staff to take care of things they forgot to forecast with their vendor. The only positive outcome may be that Clifford Clarke (City CTO) and Ed Steenman (County IT Director) may finally come under scrutiny for their lack of leadership and inability to make strategic decisions.
ACS lobbyists appear to be everywhere, don’t they?
While your concern about the outsourcing of jobs by the city, it is my guess that you personally outsource your own needs to the lowest oversees bidder.
Since gas in so high let us start there. If you do not get your gas from Sunoco, the majority of what you buy comes from overseas. Marathon should be your second choice for United States oil.
My bet is you own at least one foreign named automobile, but you have some excuse about quality or best for the dollar, yen, pound, or ruble .
The Tennis shoes you wear most definitely came from a Pacific Rim nation, but you needed that brand, didn’t you?
Your button down shirts were made in Vietnam or China.
Your TV or VCR was assembled in Japan or Mexico.
How do I know these things, you have been buying the cheapest YOU could find for so long that most of these things are no longer made-in-the USA.
It is consumer buying habits that has sent good jobs overseas, NOT the local, State or Federal Governments.
Welcome to the Global Business World and your work going to the lowest bidder — because you want more for less.
This is not about ACS; it is about outsourcing jobs and security. Those who think is a great idea, I want to know how you will feel when they come and tell you that “Sanje” or “Marie” is going to be doing your job from India or France and you can go fly a kite because you do not have a job anymore. Who is going to pay your mortgage then? Or even better, you will not think that it is funny when “Sanje” or “Marie” steal your identity and become “Clifford Clark” or “Sandy Kennedy”. I am not sure about you, but I know I do not want any foreigner having access to my personal information not forgetting city financial, probation, and health department records.
This IS about ACS and their pro-Texas lobby. Everything else is hype. By the way ACS has Sanje and Marie doing work for them as well—just down the street from these other vendors.
I would not be surprised to find ACS promoting Texas or having a pro-Texas attitude. It’s their home state. By the same token the Indian or French companies will have a pro-India or pro-France attitude.
Focusing on the previous vendor is a diversion from the real issue. The concern relates to the two current candidates. The issue as I see it is two part A.) In a slumping economy why would government want to possibly loose more jobs in the area and pump tax dollars into another country’s economy and B.) in a world where terrorism and identity theft are significant fears, why trust confidential personal information to foreign vendors, outside the jurisdiction of the United States.
If ACS did a bad job get rid of them. (It seems like the City and County are doing just that) However, that doesn’t mean the City and County need to send their money overseas and expose our local computer systems and person information to unnecessary risk.
In response to Welcome to the Global Economy:
Let’s do it then. I think we can easily outsource the 311 call center. They are only taking calls and entering them into a computer. Someone in India will gladly do that for $1 an hour instead of the $10 - $25 dollars an hour the City is paying its calltakers. CTO’s and Department heads - the decisions they make can be made by people in other countries and we will get charged less. This happens in the commercial world already, so why not do it in government also? How about 911? They just take calls and dispatch officers. Doesn’t matter where they are sitting when they do it, so let’s send it offshore for less money. Of course, I hope no one from your family has to call with an emergency and you spend 10+ minutes trying to understand each other while someone with an emergency is dying.
Yeah, I agree with you. Global Economy, let’s embrace it and put as many Americans out of work as we can. And, let’s use our tax money to do it. What a great idea!!! Mine eyes have seen the light.
There would be no RFP, no discussion about India, France, or whining about how local companies are not being looked at if only the ousted vendor had taken a little thing that we in aMerica all “Initiative”, and looked beyond the “keep the lights on contract”, and realized that their job is, along with everyone else that works for the city and county, to serve the tax payers.
Also, it looks to me that most of the money will stay local as the most expensive part of a contract like this is salary. I would expect that those who actually do their job would be retained.
Those who do not, and they know who they are, well, good luck at WalMart, where all of the products, including the American flags ar made in china.
I think this slogan, because you want more for less, is about twenty years out of date (B2B) and at least ten years out of step with today’s consumer.
Notice I said out of date in the business world and out of step with consumers.
I’m a consumer and when I look to buy stuff - I don’t automatically look for the lowest price. I don’t think any consumer does that.
If a can of beans that tastes like crap is 50 cents per can and if another can that tastes better is 90 cents - I’m either going to stop eating beans or switch to the 90 cent can. I don’t think the rest of the world is all that different from me.
My rant on outsourcing:
Global outourcing - as it is currently modeled and being followed (by places like the city/county) - isn’t efficient nor price effective for more than 2-3 years (after it is first initiated) and in the long run, it ends up putting a business behind the eight ball from customer satisfaction.
Business, in turn, start looking for more cuts - instead of addressing the root of their issues.
The idea of outsourcing is allegedly - to give work to people in an area where you don’t want to focus your expertise and where you don’t want to have the expertise and where someone else has the solid expertise in place already (and it operates like clockwork).
Companies outsourced parts of IT to body shop mentality folks and what they’re getting in return, is what they asked for.
You really can’t fault the ACS, Tata’s, Infosys’s, etc… of the world.
If all the city/county folks are doing, is moving the management of the body shop to another group, and keeping the same body shopped people - what does that accomplish? It says to me that the city/county thinks that someone else can better manage bodies than they can.
Really? That’s kind of sad.
So here’s another question.
Who in the city/county is setting the overall information management strategy and technology strategy for city/county stuff?
Are they outsourcing that? Are they assuming that body shops figure out strategy along the way?
If anything - you all should be asking about this area because a solid Information Management Strategy + Technology Strategy = the right kind of sourcing strategy that the city/county should have.
Then, you can get down to the whole - employees vs. contractors vs. global preferred providers, etc….
Another question - who performs the IT related projects in the city/county? Is that outsourced too?