Sanjay Negi's thoughts on Current Affairs and Information Technology Directions.

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Sunday, July 02, 2006

Lean Organization and Outsourcing

The "leanness bug" has caught up with the IT function as well. By definition, "lean" implies minimum fat with just muscle and bone. I dare say that people are people and not fat or muscle or bone. Given a chance an average person would like to contribute positively like a muscle and not doze around like fat. However with the frenzied advancement of technology driven processes, people do become obsolete and therein lies the challenge.

On a macro scale, organizations which do not keep updated with best practices will get pushed to the corner in the marketplace and may have to either live on the fringes of the economy or entirely cease to exist, in either case employees welfare will relentlessly head south. On the other hand, organizations which keep pace with technology advancements will discover that large sections of their workforce turn underemployed and eventually surplus with attendant painful and traumatic consequences.

There is no free lunch and no steady state for ever. Leanness as a goal can quickly become a fad which we tend to follow for fashion sake. What is important is to appreciate the underlying logic. It is true that advancements in technology and processes will create fat and it is true that people with best of intentions and capabilities will not be able to keep pace and will be rendered obsolete. May be organizations need to be be redesigned keeping in mind these inescapable realities. May be that is the underlying logic which is driving the outsourcing craze. Why build permanent manpower structures it these have to fade out in the near future anyway. May be the concept of use and throw (disposable)is finally catching up with human resources as well.

It is good to remember that organizations not facing free competition do not have to go by the rules outlined above. Thus a large section of the economy is immune to market forces, be it the Government, Public Sector, Commodity Cartels or even dominent monopolists in any market segment. In these organizations, employees can thrive while their knowledge and skill fossilizes, but the rents keep coming in, sometimes funded by the tax payers, sometimes by choiceless consumers.

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