Friday, January 20, 2012

Is Your Position a Commodity Ready for Outsourcing?


 In my last article I made mention to be wary if your job is easily commoditized and the word “outsourcing” is floating around the office. So let’s discuss some ways to analyze your position to find out how “commoditizable” it really is, because, unless you own the company, your position is on the commodity scale somewhere between easily replaced and possible to replace with extreme difficulty.

The Business Machine

First we need a way to picture a larger company to help us understand the analogy I intend on using here. Large companies can be pictured like a giant machine filled with gears of various size that interface with other gears in different ways. Some gears only interact with the overall machine every now and then, while others interact constantly. There can be entire sections of the machine that operate independently except for an occasional and infrequent interaction.

Each gear is a person and each grouping of gears is a department. Some gears move very fast with a lot of input and output, while others move slower with minimal input and minimal output. Stepping back and looking at the entire machine, we can see that each gear impacts the overall system in some measureable way. Would the entire machine come to a grinding halt if some small gear was removed? Probably not, but the output would be different.

The Cog Material Benefit

Now let’s look at an individual gears, we see that they are each made of different materials. We can think of a more expensive material used for a gear as one that is more important to the overall system. It’s costly to replace and any time that the gear isn’t in the machine the output is vastly changed until it is replaced at great cost. This doesn’t always have to be an important manager or executive, but someone who is critical and hard to replace, like a head programmer or the leading salesperson.

Other gears will be made of plastic, will be small and have redundancy so if it fails the overall output may not change in any real measureable quantity. These gears will be spread out all over the machine interacting in different ways with different gears. To replace these gears you may only have to walk over to the parts drawer and swap it out quickly if needed.

Tying of Gears and Men

Hopefully you can see the machine/business analogy illustrated above in terms of how you fit into your company. Just to make sure I’ll bring this full circle and cover some simple examples of how positions are analogous to certain types of gears.

Someone that processes documents with a simple set of rules for approval and rejection would be a plastic gear. The rules of the behavior are simple to learn and follow. If a document processor were to quit, a replacement could be up and running at previous capacity within a week or two. The overall impact to the business as a whole would probably be so minimal as to go unnoticed.

A person who is the main subject matter expert for a critical project would be a metal gear with system wide importance. If this person were to leave the entire project would stop. The person could be replaced, which would take a long time as far as training and knowledge, or the team could try to reconfigure to make up for the lost knowledge and work effort. In either case, a machine wide disturbance would be felt, with a measurable difference in output.

There are also a select few within a company that can be so drastically important that the entire machine could stop if they were removed. While this is less likely as a company grows, it’s still possible. Is there anyone you know at your company that everything has to go through? Someone that has all the answers that no one else has? There is your gear made of the strongest and most expensive stuff, a gear that may never be replaceable.

An Honest Material Analysis

Think about the three types of gears above, and the infinite range of gear types within them. Which are you? Step back and think about how your work impacts the overall business. Once you have an honest appraisal of how you impact your business you can determine how hard it is to replace you. Are your duties repetitive? Was you training short and simple? If you go on vacation does anyone notice a drop in output?

Honesty with your self is the most important part of this process. Coming to terms with who you are in the machine will only help you figure out your next move, which is to become a more expensive gear. Coerce the machine to be more dependent on your gear’s functionality. If enough processes become dependant on you, the overall machine can’t afford to have a simple plastic gear in the position.

Start small in your aspirations to test the waters of change. Not every machine wants to reconfigure, and if it doesn’t you should take your gear and find a more flexible machine. It won’t take long for decision makers to notice they have a plastic cog doing a metal cogs work.

Circling Back to Commodities and Outsourcing

It should be obvious by now that a company is less likely to outsource something that is not a commodity. A plastic gear is a commodity; a complicated custom gear is not so easily commoditized. Be a complicated and custom gear made of the most expensive material. Be someone your company would have to be crazy to try and replace. Outsourcing a complicated position is …. well … complicated!




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