Modern Middle Manager
Primarily my musings on the practical application of technology and management principles at a financial services company.
Microsoft IT Organization

Monday, January 02, 2006  

Looking for benchmarks I came across this page on Microsoft's IT organization. What caught my eye was two things:

1. Microsoft's organization is broken into two pretty standard groups, infrastructure and application development (internal IT services is basically infrastructure as far as I can tell). This is similar to the ideal division drawn up by Baschab & Piot in The Executive's Guide to Information Technology.

2. They rely heavily on contractors. That point doesn't sound as stupidly obvious as you might think. Yes, I am well aware of their use (and abuse) of contractors. However, I think I've missed something important over the years.

Once upon a time, I thought I'd never use contractors because I believed that you should hire employees, mold them the way you wanted to fit the corporate culture, invest time and energy into them and nuture them into great corporate citizens. That sounds great (OK, it sound like naive horse manure) but it doesn't necessarily work out. What happens when project demand is not smooth? What about keeping up the employee's technology skills while still getting the work done?

The answer may lie in exploring contract labor. For the first eight years with my current company, we institutionally feared outsourcing and contracting. Two years ago we broke the outsourcing fear and have outsourced/hosted several important support applications. Last year we used offshore development for the first time, implementing a software project that paid for itself before it was implemented in its entirety. This year will be the year we break the contracting taboo. I have a small cadre of very bright people working for me who are just not able to absorb any more training without significantly impacting their ability to execute. I do not believe that you use smart people by working them to death -- the more people work 50-70 hours per week, the stupider they get. So it's time to supplement our labor pool.

As I see it, contracted labor can be used in two ways -- to augment existing staff and on a per-project basis. I have need for both. The downside of contract labor is that their accumulated knowledge walks off the job probably every 6-24 months as a new person rotates in. The upside is that a contractor can be dismissed for any reason without turning the department inside-out if he/she turns into a problem. Bad employees are time sinks and it takes a long time to get marginal employees out.

posted by Henry Jenkins | 1/02/2006 07:34:00 PM

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