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Thursday
Dec202007

The End of Outsourcing?

Gary Zeiss wrote this on Outsourcing.org the other day and he makes some really strong points. He explains how outsourcing isn't meeting expectations. He says that most of the blame falls on the clients because of their short-sighted cost cutting mentality.
 
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"Part of the problem is that outsourcing hasn’t, in the main, created real value for those who partake in it. Certainly, lower costs have occasionally occurred - although these have often been offset by higher administrative costs and quality problems - but true value has been elusive, at best."

"There are a world of opinions as to why this is the case, but I would submit that the entities who outsourced were primarily at fault. Why? Because they weren’t seeking or allowing for the creation of true business value. From the inside, it isn’t even clear that lower costs (on a transaction basis) was the underlying reason, either. Sure, “cost cutting” and budgets were talked about liberally in outsourcing plans, but in many cases, little effort was expended to create internal infrastructures to mange the outsourcing deals to ensure that cost reductions were realized."

Outsourcing has to be approached with a partnership mentality. 'Lift and shift' or outsourcing temporary projects will not provide the symbiotic relationship necessary to truly derive the benefits of outsourcing.

Reader Comments (1)

We have succeeded in providing a quality edge to our online business with outsourcing software technology. Additionally, this promises to cut project cost and enhance project management capability along with improvement in efficiency of in-house staff allocation.

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