I mentioned the AOLT All Hands yesterday. It was the first "public" showing for our new CTO (and her senior management team, myself included), and I thought she came off quite well: Talked the talk very crisply.
Now its time to walk the walk :)
However, there was a question that came up during the Q&A which I felt was very important, emotionally, and under-answered during the session. It was a tough question, and my post here is in no way intended as a slight on the answer given at the All Hands (which I did not deliver) - but with some time to reflect, I wanted to try and address it again. "Answering" it is probably beyond my reach.
The gist of the question was:
Q: There is a lot of fear and a lot of talk about outsourcing [and offshoring]. There have been a lot of initiatives to start outsourcing [and offshoring] certain jobs to Bangalore. But what’s not clear is if outsourcing working for AOL. We have several examples in AOLT now where we have successfully outsourced functions or systems and it appears that we should have enough data to be able to quantify those results. What are the key business metrics any organization should be looking at before they say, this is working, or no, it’s not working? Is AOL really saving money from these outsourced initiatives, and if so, can we get some information or data on that?
I think the underlying question can be fairly summarized as: "I understand that offshoring saves us money, on paper - i.e. cost per hour - but do we know (and how do we know) that it saves us money really, i.e. cost per unit of productivity?"
Or, perhaps, even more succinctly: "If its not working, let's stop doing it." (which isn't really a question :))
Here's the problem (and I realize this will seem like I'm dodging, ducking, dipping, diving and, uh, dodging): its just the wrong question.
If "they" are not as productive in our execution (which, of course, "they" are, mostly, though not always and not uniformly - just as anywhere) then that's STILL not a reason to not continue offshoring where it makes sense on paper. We should, naturally, know and deal with productivity issues, such as they may be - but it doesn't change the idea that we, as a Company, and as a managment team, should pursue offshoring and outsourcing.
The issue is, of course, that this is a really touchy subject - and for good reason - it triggers patriotic sensibilities, as well as real job security sensitivities.
However (and this is a big "However", because I don't want to or mean to dismiss these concerns lightly) we have to recognize that there are smart people ALL over the world. It behooves us to figure out how to be advantaged by them - this was certainly a major point that Eric Schmidt, CEO of Google, made when he visited, and he's right.
I'm not saying people are smarter elsewhere, but, tough though it may be to admit, all over the world there are people JUST as smart, and JUST as talented, and JUST as effective. To compete at the scale that AOL does (and needs to) - to compete at a global level - we need to be able to leverage smart resources all over the world.
No one asks, "Why do we offshore [sic] to Mt. View, California?" after all. As AOL, we need to be wherever the talent is, and that includes Bangalore.