Outsourcing DIY: Less Expensive, Less Scary, More Effective

Stephanie Overby’s CIO/Computerworld article is certainly thought-provoking.  Essentially, Overby eschews spendy consultants for analysts and independent consultants, pumps up the smart employees already working for a company, recommends companies take advantage of less expensive templates available online, and finally suggests companies start with smaller projects where vendors get the opportunity to prove their worth and internal resources learn the ropes.  What’s not to like about that?

In fact, Phil Fersht, the top outsourcing industry analyst, has blogged this year (here and here) about the troubles facing advisory firms.

Undoubtedly, Companies can be smarter and, despite scare tactics to the contrary, they can do this themselves.  Here’s why:

1. Have Confidence – Whether you’re outsourcing a call center or an application development function, know that if you have a strong grounding in the operational aspects of the outsourcing engagement, you are 70% on your way to doing a fine deal.
2. Know What You Don’t Know – Use analysts and independent consultants to review progress and provide specifics, but do not use them to manage a project.  Many advisory firms can benchmark your contract and pricing for a relatively small amount, which may be worth the piece of mind. Outside legal counsel can also be helpful at times.
3. Negotiate Flexibility – Vendors will lure you into long term contracts that make termination and change very, very expensive.  Shorten contracts to 3-4 years, give yourself as many outs as possible, and stick to your guns on the costs of change, while anticipating potential change and building that into the contract.
4. Network, Network, Network – There are an overwhelming number of people with experience.  Read the resources available online, ask colleagues at other companies, and seek out professional organizations.  Learn the pitfalls, be curious, and apply what you learn to your company’s culture and objectives.
5. Go Slow – Budgets may be budgets, but many a person has lost his or her job for rushing into an outsourcing engagement without first confirming the targeted areas can transitioned to an outsourcing vendor and sustained thereafter.

Related posts:

1. Desperate Measures Include Outsourcing?
2. Vendor Management Differentiates in a Commoditized Offshore Outsourcing Industry
3. Offshore Outsourcing Vendor Governance Organizations
4. Outsourcing Governance and “Who Owns Supplier Performance Management?”
5. The Business of Outsourcing Certifications