Rise and Fall of an Information Technology Outsourcing Program: a qualitative Analysis of a Troubled Corporate Initiative

Organization chart taxonomizer—architecture and business strategy versus project 
delivery. 
The metaphor of a software factory is an appropriate way to consider executives’ 
desire for control and predictability of IT operations. It also defines employees’ general 
experiences working under this power structure. Following the IT reorganization, executives 
focused on the speed and quality of the Project Delivery Teams’ output. Much as one would plan 
and measure the separate workstations of a factory’s assembly line, each Project Delivery Team 
specialized in a different phase of the software development process. As a result, workers 
became conditioned to focus primarily on their individual station’s input, operations, and output 

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rather than on the efficiency of the entire process. As Braverman (1998) suggested happens with 
most skilled labor over time, Icarus executives separated “thinkers” and “planners” from the 
larger population of “doers” and “builders” whose purpose became maintaining a steady, 
predictable stream of output: 
I think predominantly [the IT reorganization] really was a huge step in terms of how we 
actually were developing our matrix organization. I think what I saw as a part of [the IT 
reorganization ] was a segmenting of skill sets in terms of really organizing people 
around what they do best. What people do best in terms of IT delivery might be best 
[described as]...I don’t want to call it farmed out, but essentially like segmented out...to a 
different organization, or maybe even competing organizations, [to] actually perform 
those functions. (Employee, personal interview, December 3, 2012) 
For Icarus, the thinkers and planners could be centralized and local, away from the IT shop floor, 
while the doers and builders could be anywhere and isolated from the planners. There were 
always more doers and builders than thinkers and planners; therefore, executives emphasized the 
cost and work control activities on the former. It is a reasonable assumption that executives’ 
expectations for the Project Delivery Teams was to rationalize and simplify as much work as 
possible while maintaining control with a minimal amount of overhead expense. 
Employees generally claimed the new matrix-style organizational structure added 
additional overhead: “We spend more time trying to figure out who owns it [a problem or 
responsibility] or who needs to work on something versus [doing] the actual amount of work 
itself” (Engineer, personal interview, December 4, 2012). One employee described the pre- and 
post-reorganizations as the difference between working across a handful of “silos” to navigating 
thousands of “chimneys:” 

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Pre- [reorganization], you knew just the way things were run for quite a while. You knew 
who your contacts were [in] the different areas. You knew your roles and responsibilities 
were pretty clear…but it was an older way of thinking, so there wasn’t a lot of flexibility 
to move people in and out. Those are some of the negatives. The [reorganization
]
is, to 
me, I describe it...as, “We went from a number of silos, half a dozen or more silos, to 
about 3,000 chimneys.” It’s caused a bit of confusion because of all the different 
chimneys. (Employee, personal interview, December 12, 2012) 
This confusion or “chimney” navigation led to ambiguity over task ownership and was most 
notable in the Project Delivery Teams. While the Business Strategy Teams maintained an 
alignment with discrete lines of business, many of the engineering functions were treated more 
like a software factory. In the previous model, engineers had experienced more static alignment 
to specific software systems that they designed, built, and often supported. In the new model, 
their responsibilities were divided into smaller areas of specialization and their assignments were 
spread across multiple projects. Where they previously worked on a few projects from beginning 
to end, the new structure required them to specialize on specific technologies or job functions. In 
the new structure, they were treated like a commodity and used on demand for multiple projects. 
Conceptually, executives believed this would lead to an optimized IT department. In hindsight, 
some recognized the ineffectiveness of some elements of this operating model: “The downside is 
we’ve gone to a much more matrix model, and we’ve gotten very inefficient in parts. We’ve got 
a lack of clear accountability” (Executive, personal interview, March 3, 2013). 
Employees saw a line being drawn between Business Strategy and Project Delivery 
teams. The Business Strategy teams retained affinity with their business functions, owned the 
budgets, and were seen as the area to work in to have the most influence within the IT 

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department. Conversely, the Project Delivery Teams were segmented, staffed predominately 
with TechStaff contractors, and perhaps seeded with lower-performing employees:
At that point in time, we did not talk openly about outsourcing all of the [Project] 
Delivery pieces, but it was something that was pretty evident to me. That’s where we 
[were] positioning ourselves [by] drawing a line of separation between Business Strategy 
and the rest of the [Project] Delivery with the intent that the Delivery pieces would then 
be given to a vendor in the years to come. (Employee, personal communication, October 
8, 2012)
Employees also described the reorganization as creating a “separation of classes” and suggested 
that executives placed poorer-performing employees down in the Project Delivery Teams rather 
than up with the Business Strategy Teams: 
We started to see some subtle yet pretty obvious lines being drawn. Even people from a 
director and VP perspective [positioned] where they wanted to reside. In my opinion, 
what I started to see was kind of a separation of classes. They [IT executives] were 
pulling some of the, I don’t want to say “top talent,” but in many cases, some of the top 
talent in to Business [Strategy] areas. Those were the components that were going to be 
retained by Icarus . . . [with the] thought leadership being retained and positioned within 
Business [Strategy Teams], [and the] strong execution, “doers” if you will, being 
positioned within [Project] Delivery. From a director and VP perspective, people really 
wanted to be positioned within Business [Strategy Teams]. (Employee, personal 
communication, October 8, 2012) 
Whether executives deliberately placed poorer talent down in the Project Delivery was not 
entirely apparent. What was evident to employees was reorganization was a type of schism ritual 

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a la Lincoln (1989) that separated the formerly integrated society. Furthermore, in their minds, 
the reorganization and specialization of duties within Project Delivery made those teams 
especially vulnerable to future outsourcing or “massacre” rituals. 
Braverman’s (1998) view of the commodification of skilled labor and the concentration 
of labor-process knowledge in managerial “planning roles” is applicable to employees’ views of 
the IT reorganization. Employees would go on to connect SSP with their view of the IT 
reorganization as a segmentation of certain sets of skilled labor in the Project Delivery Teams. 
As one later put it, “I have to be honest. My initial reaction was probably one more of . . . well, is 
[SSP] what [the IT reorganization] was leading us to” (Employee, personal interview, December 
3, 2012). Another employee recalled executives’ communication at the time of the reorganization 
with suspicion: 
I think many [employees] have even been in denial. I think the communication that even 
came out when we went through our [IT reorganization] just short of three years ago was 
so anti this [outsourcing] message that it actually made you wonder—they’re going to 
great lengths to say that we’re not moving in this direction. It almost made you wonder, 
“Are we moving in this direction? Because you’re [executives are] trying so hard to tell 
me that you’re not.” (Employee, personal interview, October 8, 2012) 
Increasing the productivity of Icarus knowledge workers following the IT department 
reorganization had more to do with labor division and rationalization than with giving employees 
flexibility and the permission to think. Executives created a software factory of teams divided 
into groups focused on certain technologies or aspects of software development. As Braverman 
(1998) discussed, the commodification of skilled labor is a continuous phenomenon. Put 
differently, scientific management approaches to information technology do not bode well for 

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engineers. As the Phoenix Era was ending, executives would go on to create and play with a 
Global Staffing Model “ouija board” to suggest a rational and legitimized approach to 
outsourcing Project Delivery functions they deemed as “less differentiating.”