As many organizations are moving into their second and third generation of Information Technology (IT) outsourcing, they are looking beyond cost reduction to significant business advantage in their outsourcing relationships.
For those who have negotiated multiple outsourcing deals over the years, there is no question that there are indeed common problems and challenges faced in almost all outsourcing deals.
In fact, results of PwC’s Global BPO Top Decision-Marker Study, conducted by Yankelovich Partners among CEOs, Presidents, CFOs and CIOs of $1 billion companies worldwide, indicates that 65% of these decision-makers at high technology companies report that the importance of BPO at their companies has increased over the past three years and that 70% have outsourced one or more business processes to an external provider. And, remarkably, over nine of ten (94%) technology executives state they are satisfied with the BPO initiatives at their companies
Although the things your mother never told you about outsourcing may be numerous, they generally fall into two main categories, the procurement process and relationship management.
In the past 30 years, outsourcing has evolved from a facilities management system for IT to an almost generic method of contracting.
Mark Richards, manager network operations, for TransAlta, an investor-owned Canadian electrical utility company, views problems in outsourcing from a slightly different perspective than many others in the marketplace.
Focusing on ‘What,’ not ‘How’. The contract — along with effective management — also is a key issue in any discussion of common problems. Even more basic is an understanding of what outsourcing is and what it is not.
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