When an organization is considering outsourcing in any of its “shore” forms (offshore, nearshore, onshore), rumors will spread like wildfire, fueled by rampant speculation regarding motive. This Executive Update walks you through the process of knowing who the stakeholders are and what they want to know over the outsourcing lifecycle. More important, the Update suggests how to allocate your scarce time and effort to what really matters.
Benchmarking of outsourcing contracts has recently become a highly desired practice by client organizations, but it is often poorly executed. It can be a difficult and expensive process regardless of how services are sourced, internally or externally. This two-part Executive Update walks you through a few of the issues, including approach options and opportunities to consider when thinking about benchmarking as part of an outsourcing decision or deal.
The “human side” of an outsourcing deal may be difficult to visualize at first, but if the fears and apprehensions of your staff are not managed well, it may not be long before it is the leading problem your organization faces. This Executive Update takes a brief look at some of the factors and issues that must be planned for when staff will be affected by outsourcing.
A good contract is important to outsourcing; this is an indisputable statement. The contract is the legal basis of the outsourcing agreement and therefore of fundamental importance. However, there are two different research-based views as to just how important the contract is.
It is difficult to develop KPIs (Key Performance Indicators) that work well in practice. Unless you design KPIs carefully, they will have varying degrees of inaccuracy and incompleteness, or get implemented in ways that ‘get the numbers’ but not the results you envisioned when you set up the contract.
Like any other outsourcing areas, many experts in the field argue for and against Information Security Outsourcing (ISO). Some say information security should never be outsourced, while others say that using expertise of a security outsourcing supplier makes a great business strategy. Some claim ISO creates complexity, is less secure, and still requires the organization to take all the responsibility. On the other side, those for ISO say that it is more secure and cost-effective. In this Executive Update, we look at each side of the debate.
Outsourcing firms tend to market themselves as partners in innovation, and firms consider adopting an out- sourcing strategy as a way to attain competitive edge. While outsourcing is a promising approach, it can also be a risky endeavor, as it may deter the firm’s inherent ability to bring innovative products to market. The purpose of this Executive Update is to challenge the assumption that outsourcing is detrimental to a firm’s inherent ability to bring innovative products to market in the long run.
“Partnering” — besides being a mandatory buzzword — is a curious term. Nowadays, instead of taking over a company, we partner with them. We don’t sell anything anymore; we partner. And now, rather than outsourcing, we create strategic partnerships. While the goal of an amicable and mutually rewarding relation- ship is admirable, what each party truly expects from the other in an outsourcing arrangement formed under a “partnering vision” is quite different. In this Executive Update, we’ll examine two case studies where assumptions of a partnership and a lack of investment proved damaging.
Before you invest heavily in an outsourcing initiative, you must make sure there is a compelling rationale based on sound economic analysis. This Executive Update focuses on the financials — calculating the total cost of contract (TCC) and the payback — to get the total economic picture, which is much more than just the provider’s price.
Most client organizations expect that their providers will continually innovate or carry out some form of value-adding when there is an outsourcing contract. I write “some form” because a typical outsourcing contract does not specify what innovation is expected, let alone when it is to occur.
Most organizations are bitterly disappointed when there is no innovation, feeling that the provider has misled them or let them down. But when you examine a typical clause, you can see why it is so difficult to understand what the client expects.