Outsourcing Is Not Just About the Money

Ann All

One of the points constantly referenced in most reports about the maturing outsourcing market is companies' increased interest in factors other than cost.

 

These days, it's not as much about saving money as it is about speeding time to market, supplementing sparse workforces, or offloading routine functions to allow in-house staff to turn their attention to more strategic matters.

 

Or so the analysts tell us. There have been some exceptions, such as a Gartner survey earlier this year that found more than half of respondents used tactical IT outsourcing to attain short-term, cost-focused benefits. For what it's worth, Gartner says this type of shortsighted strategy is a big mistake.

 

A recent Hewitt Associates survey offers more of the "not just cost" mantra. According to a report in India's Business Standard, the top drivers for outsourcing are efficiency, quality, availability of manpower and cost -- in that order.

 

We suspect what companies really want is to have it all. One thing they need to remember, however: Quality may suffer if they insist on rock-bottom pricing.



Add Comment      Leave a comment on this blog post
Oct 30, 2006 7:04 AM John Quillen John Quillen  says:
Or, cost savings aren't being seen so...    "We must've done it for some other reason"    (think WMD in Iraq)  Off-shoring and the concept of "commoditized IT" and white collar jobs moving offshore are fine (Pink explains it well in A Whole New Mind).  I'm all for leveling the global playing field - raising the GNP in poorer countries - even if it means lowering the US GNP.  Some may think it sounds unAmerican, but I prefer to think of it as egalitarian.But, let's not assert that we need to move offshore to get quality or standards that are not available onshore.  If it's to get them cheaper, then it's still about cost savings. Reply

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