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

A champion surfaces.
Whether Richard volunteered or was asked to lead the effort to 
develop recommendations to address the capacity problem is a bit unclear. What is known is that 
Richard and Donald (a director working for him) lead the initiative to address the issue from the 
start, and they quickly assembled a small team to research potential solutions. At this point, no 
decisions had been made about which functions were the best candidates for outsourcing. Donald 
explains how he initially got involved in the research that would become the Strategic Staffing 
Program (SSP): 
[Richard] and [another VP] asked myself and [another IT director] to a head up an 
initiative to figure out how are we going to scale as an organization. We needed to come up 
with a new staffing model. We pulled together a group of folks to start talking about what 
that might look like. (Donald, personal interview, March 21, 2013) 
The primary function of the group was to assess whether—and subsequently quantify how—
outsourcing would add IT capacity. From a habitus and moral career perspective, the work also 
positioned Richard and Donald in key roles to build their organizational power though leading a 
highly visible stretch assignment that could benefit both of their careers if successful: 
It took [Richard] and I [sic] going in [to CIO Staff Meetings] and having several long 
conversations. We had lots of documentation on models and could show how things were 
going to shift and change. We were pretty aggressive in being able to show how would we 
look at onshore versus offshore, and how would we save [money by using] vendor[s] 
versus [employees], and what would we free up the team that was currently on those [Low 
Differentiation] initiatives [per the Global Staffing Model]. It was a whole lot of modeling 
that we did that helped [Richard] work through that conversation [with the other VPs]. 
(Donald, personal interview, March 21, 2013) 

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The data model Richard and Donald delivered included employee and vendor staffing numbers. 
However, no data beyond the (subjective) GSM debate existed for defining and assessing the 
level of work differentiation. In Bourdieu’s terms, one can see how the outsourcing research was 
a means to accumulate cultural capital (1983/1986)—it would launch SSP and become the next 
major probationary crucible (Jackall, 2010) or stretch assignment in Richard’s and Donald’s 
moral careers. Through the growth paradigm lens, all of this work was considered typical or 
within the bounds of the normal science of business problems facing Icarus at this time. 
Contrary to traditional views of outsourcing or offshoring, which focus heavily on staff 
and cost reductions, Richard and Donald suggested Icarus could increase its IT department’s 
overall capacity (without adding employees) by outsourcing “Low Differentiation” work and 
redeploying affected employees from “Low Differentiation” to “High Differentiation” 
assignments. This thinking later became a critical element in legitimizing SSP as a solution to the 
capacity problem with affected IT employees. Another executive elaborated on the need to 
reassign employees while using vendors “more comprehensively” in order to enable such 
reassignments: 
The initial [capacity problem] hinged around the increased demand coming for internal 
resources within Icarus and the huge technology agenda in front of us . . . [We were] 
looking at opportunities to free up team members where it made sense, especially in areas 
that were non-differentiating for Icarus, or where capabilities were either harder to acquire 
or retain in-house, or just too mundane or routine to want to be investing in that. That was 
the business case really, to work with a vendor partner that could kind of run something 
more comprehensively [than what TechStaff had done under Project Phoenix] for us and 
free up our internal talent. (Executive, personal interview, June 27, 2013) 

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The ability to “free up internal talent” and have a vendor run something “more comprehensively” 
would require Icarus to give more autonomy to the vendor it hired (i.e. a managed services 
agreement as discussed in Chapter One). However, the ability to let go and turn the work over to 
another firm regardless of its non-differentiation did not align with the “we can do it better than 
everyone else” element of the Icarus habitus discussed in Chapter Five. 
Executives had initially envisioned Project Phoenix as a managed services agreement, but 
that effort had devolved into a large-scale staff augmentation model, although that outcome was 
not acknowledged openly. As Brown and Duguid suggested is often the case with strategies over 
reliant on information at the expense of historical and social context (2000), IT executives failed 
to examine the reasons why Project Phoenix never succeeded. Instead, executives’ infocentric 
tunnel vision led them to ignore context beyond the data they found to be most interesting. Said 
differently in Brown and Duguid’s terms, IT executives took “the most rapid point of change 
and…extrapolat[ed] from there into the future, without noticing other forces that may be 
regrouping,” (2000, p. 31). In applying the GSM to the situation they faced, Richard and other IT 
executives ultimately decided that pursuing a managed services or outcome-based contract 
would maximize the number of employees who could be redeployed to the most important or 
differentiated work and thus solve the “capacity problem” while neither advocating for or against 
a direct replication of the Phoenix model. 
In order to qualify outsourcing a function or set of capabilities from the IT organization as 
a legitimate decision to their employees, executives needed to frame the work to be outsourced 
as non-differentiating when viewed against the Global Staffing Model. Further, it meant that one 
or more of the executives themselves would need to outsource some or all of the affected 
organization unit. Donald described this process: 

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First of all, everybody understood that the problem we needed to solve is how are we 
going to scale. The piece that got very difficult was . . . once we understood the problem . 
. . we started creating frameworks. Some of the frameworks were around how would we 
select the appropriate area, and so we looked at some of the [Global Staffing Model] 
work . . . and which capabilities were differentiating or non-differentiating. We made 
assertions that work that was non-differentiating . . . would be work that we should 
significantly consider [to outsource]. (Donald, personal conversation, March 21, 2013) 
In Bourdieu’s terms, the Global Staffing Model was a form of objectified cultural capital 
(1983/1986) accessible only to the senior IT executives. Its existence legitimized the need to 
outsource non-differentiated work. However, coming to the decision of which function to 
outsource was a protracted process. The image of executives playing with the GSM like a ouija 
board is again relevant. Each vice president tried to influence the movement of the board’s 
planchette to land on a function matching an individual agenda. One executive described the year 
executives spent debating how extensive their outsourcing strategy should be, and which 
function to outsource, as a series of debates with no clear rules or outcomes: 
There was a lot of debate . . . and then, “Let’s all weigh in on those options.” . . . Then I 
think we spent months—I’d hate to say a year, but a very long time [debating] . . . where 
[was] the best place to implement it [managed services] the first time? There was never a 
best place, so we spent a lot of time trying to figure that out . . . I don’t think we got clear 
enough on who the decision makers were initially, so then everyone [of the vice presidents 
assumed they were] . . . [It] took a year to even decide [what to outsource]. (Executive, 
personal communication, August 24, 2013) 

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Since outsourcing an entire function under a managed services agreement marked a significant 
shift from executives’ former staff augmentation protocols, it is somewhat understandable that 
executives would not enter into the decision lightly. However, plodding along for nearly a year 
without making a decision should have raised a question about how dire the capacity problem 
truly was, and whether in fact the GSM was too open to interpretation to be of much assistance. 
The slow pace can also be attributed to the consensus building and socializing expectations of 
the Icarus habitus. Lacking consensus, Richard and Donald were at a standstill until the right 
non-differentiated work was collectively identified by the top IT executives.