Interesting talk on outsourcing, defined as the transfer of some operational responsibilities of either business processes or infrastructure management to external agencies. The focus of the talk was on IT outsourcing, but when you come to think of it, it applies to a whole range of subjects - finance, HR (growl!), legal, accounting, catering (double growl), cleaning, training, security, you name it. I guess that any part of non-core business can be outsourced.
If you're the founder of an IT outsourcing business, you are rather inclined to point out the advantages: there's no need for the supplier to worry about recruitment, training or even keeping people on the forefront of technology; nor do you need to coddle your IT people who may get bored with routine work or insulted at having to do routine work instead of exercising their specialist skills. A selling point to managers is that in-house IT people may not work to their full potential and, besides, when outsourcing, you are in control of costs, and that leads to a stable and predictable (if not cheap) budget.
On the other hand, I'd not like to be a manager in the Bank of Scotland who outsourced to IBM - about a thousand people were directly affected. Or, worse, a manager at some time in the future at the City of Edinburgh, which has outsourced to British Telecom with a ten year contract. Shin-Etsu had quite a few cultural hiccups outsourcing to Wisdom IT and only three client employees were involved.
More smooth persuasion: outsourcing, after all, doesn't affect core business, though any identified bottlenecks could, perhaps, be outsourced. The client has control - not in a legally binding way if there was a breach of security, perhaps - but in that the supplier needs the supplier's business, just as the supplier needs the ability not to worry about non-core business. There is mutual trust in an ideal situation: but is the outsourcer a neutral and efficient supplier or just another supplier not committed to the company culture? It's a risk control situation balanced against efficiency and while the speaker is all for it (in the hope that the audience may supply future business, perhaps), the audience are less convinced.
posted by Dovya R @
7:27 AM : discuss