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8/25/2014
09:06 AM
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4 Outsourcing Mistakes Companies Still Make

Control freaks, blame games, and other misguided attempts at building a better business through IT outsourcing.

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jjobe323
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jjobe323,
User Rank: Apprentice
9/2/2014 | 8:06:13 AM
Outsourcing possibilities are increased through proper communication
"Either way, companies should not forget why they need to outsource."  We outsource because our fearless leader has decreed any job we need done that someone else advertises in the Yellow Pages shall be outsourced.  This has lead to a 70% reduction in 'regular' employees, & an as-yet inestimable cost in the commonly sneered-at concept of 'institutional knowledge'.

"We solicit outsourcing because there are times when we need extra work force for things we are dead sure we cannot accomplish and in situations that doesn't help adding the extra staff on our payroll."  Over half of the outsourced work is contracted to a single company which a) fills several staff augmentation position in this business area already, b) is owned & operated by a person who used to work for the organization [i.e., was around when the current masters were serfs], & c) acquired over 50% of its staff from people who used to work in this organization.  While there may be no collusion or kick-backs, it seems a bit too cozy an arrangement.  The APPEARANCE of impropriety, after all . . .

"Companies should thus ensure that they hire the right people and for the right reasons, and because these reasons can change, consistent communication between the two parties is paramount."  For those of us who still work as employees vs. staff augmentation, it looks a lot like there's some sort of quid pro quo between our organization & the seemingly overwhelming favourite outsource company management prefers.  Yes, the bids are lower than other companies, but the deliverables are inferior, require massive expenditures in resources to repair or even implement, & the favourite outsource company gets ever fatter.
jjobe323
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jjobe323,
User Rank: Apprentice
9/2/2014 | 7:46:25 AM
2. You focus on pay rates over results
Amen, Sibling.  (Not taking anything for granted even though you include a picture.)

It has been our unfortunate fate to be the port-o-potty clean-up crew.
SunitaT0
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SunitaT0,
User Rank: Ninja
8/31/2014 | 2:40:19 PM
Re: On the subject of control freaks . . .
Highly skilled employees are easily found but they are not compensated well in terms of western economy, and not just that, the time difference and possible miscommunication creates a whole plethora of problems for employees and outsourcing managers alike.
shamika
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shamika,
User Rank: Ninja
8/31/2014 | 7:55:45 AM
contingency
Well what do you all think about keeping the main business place as the contingency site
shamika
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shamika,
User Rank: Ninja
8/31/2014 | 7:53:59 AM
Re: Pay rates and potential
@ SachinEE I have seen most of the outsourced work is directed to the south Asian countries. I believe it is mainly because of the low labor charges.
shamika
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shamika,
User Rank: Ninja
8/31/2014 | 7:51:04 AM
Re: On the subject of control freaks . . .
While outsourcing takes place it is also important to look in to aspects such as; highly skilled employees, people with specialized knowledge, ability to perform highly repetitive tasks.
shamika
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shamika,
User Rank: Ninja
8/31/2014 | 7:48:40 AM
Re: On the subject of control freaks . . .
In my opinion, more small businesses are outsourcing tasks these days because technology has advanced to the point of professionals being able to work from anywhere in the world, coupled with the availability and accessibility of extremely qualified professionals who have decided or been forced to leave the corporate world, for example  virtual executive assistants, marketing directors, graphic designers, transcriptionists, paralegals, web designers, HR consultants, bookkeepers, PR directors, IT specialists are some of the main areas.
zerox203
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zerox203,
User Rank: Ninja
8/30/2014 | 11:14:57 PM
Re: Outsourcing Mistakes
The funny thing about all this is, ''Outsourcing" is not (or should not be) a buzzword, a dirty word, or any other kind of special word at this point. It's a standard practice that's been around forever - it ought to be well understood, and not viewed as some foreign, inexplicable process by IT managers. Yet, you're exactly right, Shane - these seemingly obvious mistakes still seem all too common at companies both large and small. Do we really still need to tell trained professionals that they need to communicate their needs with their business partners (or risk failure!),  just because we're dealing with outsourcing? Apparently, we do.

There's no doubt that there's plenty of room for discussion on best practices when it comes to outsourcing, because it's a complex area.  At the same time, though, there ought to be a certain base level of competency that can be expected of managers on the topic... or they should not be employed in the first place. Now, in fairness, this applies to the managers on the other end of the outsourcing equation  (foreign or not) as well, right? You shouldn't need a memo to tell you that your client would like profits to go up and cost to go down, that's a lame excuse. If you're going to advertise that you can provide someone the same service as a competitor at a better price, then you should back up that claim.
yalanand
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yalanand,
User Rank: Ninja
8/30/2014 | 2:21:30 PM
Outsourcing possibilities are increased through proper communication
The observation in this post by Shane O'Neill underlines just how costly outsourcing mistakes can be, whether the errors are committed by the client or the outsourcer. To gain from the flexibility accorded by outsourcing, companies should never ignore the outsourcer and they should maintain effective communication for a mutually beneficial relationship.

Either way, companies should not forget why they need to outsource.We solicit outsourcing because there are times when we need extra work force for things we are dead sure we cannot accomplish and in situations that doesn't help adding the extra staff on our payroll. Companies should thus ensure that they hire the right people and for the right reasons, and because these reasons can change, consistent communication between the two parties is paramount.
KarthikS742
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KarthikS742,
User Rank: Apprentice
8/29/2014 | 2:40:54 PM
More frequent communication around Business goals
"Business goals can be moving targets, and if companies don't keep explaining those goals throughout the process, the relationship will sour fast. "

In my experience - this particular point cannot be stressed enough. The IT vendor makes several investments in terms of having a business savvy engagement management team , a team that not only provides IT operations management expertise and technology consulting input but also an understanding of the sector or business. However in some cases those investments aren't leveraged well because of inadequate attention given to this aspect. If a client is interested in the vendor helping it meet business results, it should emphasise that the engagement leaders have some understanding of their business and also invest some of its time in explaining its business goals driving the IT initiative and giving updates on those goals from time to time. 
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