The Biggest Mistakes You Can Make in Your Outsourcing Deals
February 24th, 2010During the past year, 50% of 1,073 organizations worldwide saw a sharp uptick in outsourcing contract renegotiations, according to recent research from Gartner Inc. in Stamford, Conn. Many of those contracts were renegotiated in a bid to cut costs, due to the recession.
The recession causes bad behavior on both sides of the coin, the client and the supplier,” said analyst Allie Young, research vice president and distinguished analyst in Gartner’s technology and service provider group.
This seemed like a good time to look for the warning signs of an outsourcing deal gone bad. We spoke with three experts on the misconceptions, missteps and mistakes that spell trouble. In this first article of a two-part series, TPI’s Thomas Young, explains how lack of innovation and productivity gains, as well as culture clashes, can break down an outsourcing contract. Be prepared for self-examination. Many of the telltale signs have more to do with …
Making Outsourcing Work: Avoiding Three Common Fallacies
January 5th, 2010By Ilya Bogorad
“If you are considering outsourcing within your organization, you have to instill a sense of transparency and accountability to make sure that difficult issues are openly discussed, diagnosed and acted upon”
Few subjects are as controversial in the business world as outsourcing, be it offshore or nearshore. If you invite a group of executives, managers and professionals to discuss the subject, the resulting conversation won’t be boring.
Horror stories will intermingle with accounts of epic success, passionate disagreements are virtually assured and in extreme cases some hot heads would insist on taking it outside. Serving strong coffee at such an event is not a good idea and alcohol should be avoided entirely.
If you are thinking of outsourcing one of your functions or business processes, you may emerge from a discussion like this quite confused. In the cacophony of opinions, who should you listen to? I suggest that you listen to me.
What the Other Partner Can Offer
Outsourcing is as old as the hills. Ever since the division of labor has come into existence, people have procured services and products from each other because the other party could furnish them better and/or cheaper.
The procured services or products can be used for internal consumption or form a part of our own product or service offering. As an example, we don’t have a recording studio in our office. When we need to make an audio or a video recording as a part of our work for a client, we pick up the phone and call professionals. It would be cost prohibitive for us to do it in house, in terms of both time and money. Besides, this is not our core competency.
