So a big company decides to embark on a new project that will integrate one of their largest internal applications to work for offices all around the world. It will save the company a few million dollars every year so it’s very important to implement at whatever initial cost. They decide to outsource bulk of development effort to a consulting company with only a few project managers and coordinators that are internal employees. They figure that it’ll increase their ROI even further and the numbers do look pretty impressive to the senior management. The consulting company gives them a very aggressive timeline and cost structure, something that has senior management drooling because they couldn’t even think of implementing it in such a short timeframe at such low cost.
The consulting company assigns more than a hundred contractors to the task, the justification being that the effort quoted can only be completed within the desired timeline with that many resources. They ask for licenses of software development and testing tools that are much more than needed and costs of which run into a couple of million. Since the only internal resources involved are project coordinators (they didn’t feel they needed internal IT resources), they don’t understand what is being asked for. They submit the quotes to management for approvals, who approve without hesitation because they are still blinded by the tremendous ROI this project will have.
Pretty soon, the deliverables start to slip. Developers blame poor requirements, testers blame poor quality of code, and business analysts blame uncooperative nature of developers. Lack of communication skills, offshore location of actual resources who understand the application and different time zones are added to the mix. A few million more dollars are added to the estimates. Project schedule is redrawn and scope is reduced to meet the timeline. Soon the application that was intended to work globally is reduced to work for 2 major countries. Some of this proves too late and the schedule slips even with reduced scope. Finally, the application is delivered with about 25% of original requirements implemented and 9 months later than original target. ROI looks like a joke but nobody mentions it anymore.
Company needs to cut costs. They open an offshore location and move a number of jobs to this location. The skill set available is considered worth enough at the cost to replace the people working at original location for last 15-20 years. The fact that remaining employees are facing the brunt of this decision by working extra hours doing additional work and training the offshore resources and the fact that quality of service and applications takes a nosedive is considered a temporary matter by management.