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Outsource magazine: thought-leadership and outsourcing strategy | April 25, 2015

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Peopleware: the human parameter as the critical success factor of outsourcing

Peopleware: the human parameter as the critical success factor of outsourcing
Joerg Stimmer

Hardware – Software – Peopleware

In addition to hardware and software, the term “peopleware” was created to address the third core aspect of Information Technology covering anything that has to do with the activities and interaction of people in the design, development, operation or use of computer systems.

The term was introduced by Peter G. Neumann in 1977 and became very popular when the book Peopleware: Productive Projects and Teams by Tom DeMarco and Timothy Lister was published in 1987. At that time DeMarco and Lister conducted one of the first comprehensive studies on the success of IT projects and reasons for project failure. Based on the findings of more than 500 software projects their main conclusion was: “The major problems of our work are not so much technological as sociological in nature.”

For the overwhelming majority of the bankrupt projects they studied “there was not an single technological issue to explain the failure.” The majority of issues were communication, skills, collaboration, management failures and working environment etc.: mainly peopleware!

Now, this was 30 years ago. The IT industry has evolved and things have changed dramatically. New tools and processes were invented to improve software development and support collaboration and communication. And since then the various books of Tom DeMarco and his collegues have been translated, sold, read and discussed in many countries.

But looking at today’s situation, considering the various studies and surveys that have been conducted within the last decade (e.g. by the continuing CHAOS report of the Standish Group) one has to admit that the findings of DeMarco and Lister still apply today. Still the majority of IT projects fail or do not reach the initial objectives; still the main reasons are not simple technical issues but “peopleware”; and still the main improvement focus of managers in IT industry is not people but technical issues and solutions.

But why are managers still not addressing peopleware issues first and foremost?

The reasons are of course very different and to discuss it would take far more than this article. The simple – but nonetheless very convincing – explanation of DeMarco and Lister in 1987 was: “ focus on the technical rather than the human side of the work is not because it is more crucial, but because it’s easier to do.” DeMarco and Lister compared the situation with a story of “this vaudeville character who loses his keys on a dark street and looks for them on the adjacent street because, as he explains, ‘The light is better there’.”

Peopleware and Outsourcing

What does this mean to outsourcing projects and relationships? Just simply: don’t forget the huge impact of human factors in managing outsourcing projects – peopleware!

Generally one would assume that both parties in an outsourcing relationship do have all the technical skills and the information necessary to understand the situation of a project and the necessary correction in general. The success of outsourcing projects depends on open and trusted communication, collaboration and a high motivation to support the other side for joint success. The recent trends towards agility and the intrinsic need for a more effective communication and teambuilding support this viewpoint.


Outsourcing usually does make things more complex. Outsourcing projects have to cope with specific outsourcing challenges in addition to the usual IT project peopleware issues. Outsourcing projects implement additional human and system interfaces involving multiple organisations, cultures, languages, different timezones – and often creating new peopleware issues especially within the customer’s organisation.

Often those projects start with the best intention to ensure good understanding and collaboration between customer and outsourcing partners. Within the bid and contracting period, the vendor usually has to prove a strategy for know-how transfer and collaboration. But later within the transition period things usually get tough and the focus is moving to managing technical topics, often pressing and to be solved immediately. The once-critical but long-term success factors get out of focus. As commitments and time constraints push forward the vendor has to be enabled to start working.

Hardware, software, connectivity, security, delivery of documents, working permits, legal and procurement issues: those are the things that keep managers busy. The management of the change in terms of peopleware therefore is often restricted to cultural trainings, process trainings and the completion of know-how transfer completion sheets. In addition to that, outsourcing relationships bear the risk that both sides might not feel responsible to address peopleware issues on their own. The customer expects the vendor to address and solve all problems as he gets paid for it. The vendor tries to meet expectations perfectly and does not dare to demand too much support and commitment from the customer.

The downsides are often not visible in the beginning of the outsourcing relationship. Of course some kind of problems are anticipated and expected to happen. But at the latest when an outsourcing project continuously fails to deliver the expected and committed results, questions about reasons are asked. Because the emerging technical topics were visibly managed within the project the only explanations that you might have at that time are “wrong vendor” or “peopleware issues”. Both options are not really attractive, are they?

So why don’t we cooperatively and proactively address peopleware issues in order to gain more effectiveness, efficiency, satisfaction and motivation for all partners?

To pick up DeMarco one last time: we should not spend more time in the illuminated street looking for a key that is obviously waiting for us in the adjacent dark street. Let’s enlighten the dark street and find out more about peopleware and discover the strength and courage to manage it.

To avoid any misunderstanding: the authors are very much aware of the need for profound technical expertise of the service provider and customer for a successful outsourcing project. Furthermore it is absolutely vital that any project setup includes the processes and tools to ensure both parties get clear insights in the project status and to identify the necessary corrective actions. Without all those measures, an outsourcing project will struggle and fail, even if both parties are perfectly aligned concerning peopleware. Understanding all technical issues and exactly knowing the status and challenges of an outsourcing project is one part of the cornerstones of success. Having the relationship and motivation at both parties to actively tackle the human challenges of a project is the other, necessary cornerstone (peopleware).

To be continued …..

This article was co-written with Juergen Dittmar, the founder of Cocondi – Coaching Consulting Dittmar; he also works as a freelancer with a special focus on improvement opportunities and the “human factor” in IT projects. Dittmar builds on more than 20 years’ deep and broad experience in the successful management of complex IT projects, leading heterogeneous teams and the improvement of IT organisations and processes. The last nine years he worked as an IT manager with Telefónica Germany where he also gained vast knowledge in successfully initiating and improving outsourcing projects. Besides his Masters degrees in Organisational Psychology and Geography, he is a certified Systemic Business Coach and Project Management Expert.

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