Outsourcing: know thyself

Knowing what you know now, would you still outsource?

For over half of the market, the answer to that question is no.

So where does the fault lie when a sourcing deal has turned sour and it's time to think about what to do next? That's an important question, but the point of asking it shouldn't be to find scapegoats. The point has to be to fix the problem.

Shooting the deal-makers may be tempting, but it doesn't fix anything.

That organizational shortcoming -- not knowing enough before negotiating a deal -- and not the people behind the outsourcing deal, should be the first place to lay blame.

Another place to lay blame is broken processes.

And when parceling out blame, don't overlook a community of users who haven't changed their practices.

So what sorts of things can you do to avoid the pain?

Experienced users of sourcing and those who have yet to source (because they find no benefits in it) agree: you have to know your own organization thoroughly. Skill maps, benchmarks, service catalogues, well-defined processes with established controls and discipline in which technologies are used to make it possible to examine the sourcing question using facts, not beliefs. (A best-in-class organization, for instance, won't find a financial benefit from sourcing, even though there is still room for improvement.)

Consider approaching the market using an expression of interest (EOI) approach, rather than simple discussions or a request for proposal (RFP). The EOI lets you lay out what you know about your organization and ask hard questions of the responding vendors to really understand how they'll work with you. EOIs don't require that you proceed to an RFP or to an award of business, but they do give structure to the interaction.

Finally, remember that bottom dollar is not the point -- future flexibility is. No contract is perfect; leave room to change it. Then get busy changing your own organization to work with the contract.

The temple of the oracle at Delphi had the inscription "Know thyself" above the entrance. That's sound advice for anyone thinking about -- or tasked with rescuing -- a sourcing deal.

Bruce Stewart is a former CEO and onetime senior VP and director of executive services at Meta

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