A former boss of ours, basically a great guy, couldn't get anyone to play racquetball with him. Why? Because he didn't just like to beat his opponents; he wanted to crush them. Worse, he'd brag about it later.
We couldn't help but think of this intensely competitive guy when reading a recent Computer Business Review article that details how a "winner's curse" (a term coined by a professor from the London School of Economics) adversely affects up to 20 percent of outsourcing deals.
Many companies entering into outsourcing agreements want to get an insanely good deal -- and they don't care if it comes at the expense of their outsourcing provider.
The not-too-surprising result: Service often suffers, and nobody wins. According to an outsourcing expert quoted in the article, providers should be able to make at least a 5 percent profit.
That's not to say that companies shouldn't look out for their best interests. It's especially important to do so in offshore deals, by addressing upfront such potentially thorny issues as security and intellectual property.