Nobody ever told me this, it’s something I worked out for myself, but there are two kinds of outsourcing:
1) We have no idea how to do this so we need outside help.
2) We know how to do this, and we could, but we don’t have the time right now.
If you run a capable engineering department in an oil company, you find yourself doing a lot of the latter. Back in Nigeria I ran a team of about a dozen engineers, who had the capability to do pretty much any design we’d need. But we didn’t have the capacity, so we’d outsource – what my lead piping engineer would call “hiring pencils”. Ordinarily I’d say my experience outsourcing engineering work in Nigeria was worthy of a post all by itself, but in all honesty I could turn it into a whole book. Or a broadway musical. But I digress.
I deliberately chose to keep my engineering team small and avoid the empire building so beloved of many modern managers, mainly because I could see the work came in fits and starts and I didn’t want to hire someone only to have to lay them off a couple of months later. In a country like Nigeria that is grossly irresponsible, but it happened a lot. So I ensured we had a core competency and then outsourced the leg work to someone else. This ought to be uncontroversial, because you’re not losing expertise, nor relying too heavily on outsiders to execute your core business (although oil companies do this more than they should). But it’s surprising how often even senior managers don’t quite understand when to outsource and when to keep something in house.
In my first proper engineering job I remember a bundle of documents had to be taken to a client about half an hour away by car. The project manager got a quote from a taxi firm for about a hundred quid, but the director stepped in and said this was extortionate and instead ordered one of the engineers to drive there and back in his car. It didn’t seem to occur to the dolt in charge that having an engineer drive documents about isn’t the best use of his time, for which he was paying heavily. It’s not like everyone was under-utilised at the time, either.
The most memorable example was again when I was working in an oil company, and we we’d just awarded a giant EPC contract to a major international engineering company. The contract document was like War and Peace, hundreds of pages of technical stuff and legalese. Someone in charge decided quite reasonably that he wanted a copy in his office, and ordered the department secretary to print it out. Then someone else wanted a copy, and asked her the same thing. Pretty soon the entire floor’s printers were either smoking with heat, out of toner, or the buffer so clogged up nobody else could print for days. The poor secretary had to send different parts to different printers and run around between them trying to make sure she had the right parts in the right order: the entire contract was 38 separate files, with the commercial part removed for confidentiality reasons. Everyone in the department was complaining they couldn’t print, and people’s print jobs would get swallowed up somewhere in one of the contract sections. It wouldn’t surprise me if in some future court case a lawyer opens what he thinks is the clause on Marine Warranties and finds a valve datasheet where pages 3-5 ought to be. Or a presentation telling everyone to use less paper.
Now oil companies are not known to be hotbeds of common sense, so they could perhaps be forgiven. Also, outsourcing anything – even something simple like printing – was probably not straighforward where we were at the time. What surprised me more was when I turned up to the offices of the engineering contractor in a western city and found their secretary had received identical instructions from her management, with the same side effects. Now I needed a copy of the contract myself, and on the way into the engineering offices I’d spotted a print shop on the ground floor. I put the files on a memory stick, numbered them so they were in the right order, and went downstairs. An Asian chap greeted me at the counter, and behind him was a printer the size of a car. I gave him the memory stick, nodded, and asked me how many copies. Two, I said. Then he asked if I wanted it bound, because he could do that. Sure, I said. He told me to come back the next morning, which I did. Waiting for me were two perfectly printed and bound copies of the contract. He charged me around $75 for them both, which I slapped on expenses.
I put these on the shelf in my office. One was marked to stay in my office, the other could float around a bit. When my manager flew in to visit me, he immediately spotted it. “Where did you get this?” he asked. I told him I got it printed out downstairs. He asked if I could get him a copy, so I nipped down to the print shop and ordered another. Then a week or so later his boss came out, and I got a copy for him too. Soon word got around in the project headquarters that Tim knew how to get proper copies of the contract printed out, and whenever I got visitors they came with orders to bring back one or two with them.
Occasionally, whenever I wonder exactly what it is I’m paid for, I’m reminded of this episode.