Outsource, but get the right deal

It's that time of the year again--when consultants and pundits prognosticate on the months ahead. The general consensus this time around is that things are looking good, outsourcing will accelerate--and that more companies will join the revolution. As the market matures, this will also be the year when the legion of 'undecided' will make a call.

Whether you opt to outsource, near-source, right-source or offshore, keep the focus on getting the right deal.

But, this is also the reason why we need to be watchful. Irrational exuberance over outsourcing, particularly offshoring, could quickly result in poor decision-making and sub-optimal business strategies. Leslie Willcocks at Warwick Business School suggests that CEOs actively care about outsourcing--because cutting internal costs should not be at the expense of other strategic or operational benefits. Sound advice, that.

A rising outsourcing tide lifts everyone. The proliferation of vendors, geographies and service options for outsourcing will make life even more complicated for the buyer. But whether you opt to outsource, near-source, right-source or offshore, keep the focus on getting the right deal. A deal that delivers measurable business benefits to your organization--not just the lowest costs. You have the bargaining power to structure outsourcing contracts--exercise it.

Plan, plan and invest in program management. Outsourcing is a people business, don't leave it on auto-pilot. Also, don't forget to put your best people to manage outsourcing--otherwise it can end up hurting your organization. Outsourcing is not a zero-sum game. So, learn from peers and share your experiences. It benefits everyone.

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