Hero Syndrome: Why Internal IT and Outsourcing Cultures Clash

The "stay up all night, do anything for the user" hero culture of corporate IT may win friends in the business, say outsourcing consultants at TPI and Compass, but it won't yield real business-IT alignment. And it makes it almost impossible to succeed at outsourcing.

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CIO.com: Why shouldn't the service provider adapt to the internal IT culture? Don't IT outsourcing customers want a responsive, flexible provider?

Mathers: It's tempting to do that, especially in the early days of a new agreement where the vast majority of vendor resources supporting the client are the same ones that have been supporting that client for years. They worked for the client, and now they work for the vendor. But now they're trying to cope with how to keep everyone as happy as they've always been while adhering to a new process-driven delivery model that appears to be standing in the way.

But being reactive and supporting a client on an ad hoc basis flies in the face of what the outsourcing value proposition is all about; they are entirely incompatible. If a vendor continues to support each client the way they always have [been internally], they sacrifice their ability to achieve any sort of economies of scale and efficiencies across their client base that, in turn, allows them to deliver the value and lower prices that the client outsourced for. In the last one to two years, we've seen the market move towards greater standardization of services and process in large part because clients and vendors recognize that this is a problem that has got to be fixed.

CIO.com: You note that hero environments, while inefficient, often produce positive, collaborative working relationships between the client and vendor teams. Why is that?

Dreger: The camaraderie that defines the hero culture—client/vendor teams pulling all-nighters to solve a problem, senior staff stepping in to do the work of junior staff—creates a sense of teamwork and collaboration. But that positive team spirit prevents opportunities to improve.

Rather than pulling all-nighters, they should be finding ways to prevent problems that require people to work all night. And when you have senior people doing the work of junior people, you allow knowledge and skill gaps to grow, rather than closing them.

CIO.com: How costly is this to the outsourcing customer?

Mathers: The example of senior staff doing work of junior staff is perhaps the most basic. That results in lower productivity and higher costs. A related problem is duplicated effort. If everyone is pitching in to help one another, then it's not clear who has what roles and responsibilities, so utilization and productivity suffer.

Quantifying the cost impact of the hero culture specifically is difficult, but the cost impact of the related issues that culture drives — process inefficiency, duplicated effort, ambiguous roles and responsibilities—can add up to 10 to 20 percent of total costs.

CIO.com: How can IT outsourcing customers avoid this culture clash in the first place?

Mathers: Outsourcing works best when the internal organization has already been working with a process-driven model before the outsourcing happens. IT personnel and the business have already gone through the pains of moving from relying on heroes to relying on processes. The outsourcer may have even more rigorous processes, but at least the client has some appreciation for what it means to work within a standardized environment and what some of the benefits can be. If organizations don't do this, the move to an outsourced model will be painful, and the outsourcer will be seen as inflexible and difficult. Those perceptions can be corrosive to the relationship and take a long time to fix.

CIO.com: What can IT service providers do to remedy this on their end?

Dreger: It has to be a collaborative effort on the part of both parties, and it has to include executive-level support. What we've often seen is that, after a transition, there's some maturation and some implementation of process discipline. But then it stalls. At that point you need to come in and do a baseline, see where you're at, and get both parties to reassess and re-commit to the need for process discipline. Being able to quantify the benefit of that change is essential.

It's also important to create incentives and rewards—both individual and group-based—to give the heroes a stake in the implementation of process discipline. They can feel threatened by an initiative to instill consistency and repeatability, because it can make them less visible.

CIO.com: Why is it so hard for corporate IT groups to embrace standardization? Is that changing?

Mathers: Standardization can be seen by clients as constraining unless the benefits are clearly laid out. They need not only to understand how they will need to work differently, but what the benefits of that change are.

We're seeing clients take the time up front to map out what a standardized service model can look like, including leveraging utility-based services, demand management and appropriate tensioned pricing mechanisms to quantify the size of the prize. The benefits can be significant; some have reduced costs 30 or 40 percent. The level of savings the organization should target depends on their appetite to make some of the changes. For some more conservative organizations, savings may be 15 to 20 percent. The largest savings will be reserved for those that are truly willing and able to transform how they deliver services to users, and how users consume those services.

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Copyright © 2011 IDG Communications, Inc.

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