Devoted to Managers and those that seek to improve their management skills

Here are a few lessons you can learn from the big companies concerning the increasingly complex strategy of outsourcing.

a

First of all, the great majority of large companies are starting to hire multiple outsourcing vendors. This gives a much greater probability of saving money and getting more specialized services.

a

It is getting extremely hard to get all of this from one vendor anymore, no matter how big they are.

a

Along with this they are realizing that it is now essential to train their IT workers in vendor management skills. While multisourcing will remain the principal sourcing model, CIO.com gives this report:

a

“Through 2007, according to research group Gartner, multisourcing will remain the dominant sourcing model, but fewer than 30 percent of enterprises will have formal sourcing strategies and appropriate governance in place. In a 2004 survey of 130 CIOs, 42 percent said they were dissatisfied with their outsourcing relationships, according to outsourcing advisory company EquaTerra. And the primary reason cited, according to EquaTerra, was a poorly developed, underbudgeted, under-resourced governance model.” 

a

"Companies that don't put professionals in there to handle the relationships will get outmanaged and outexecuted by the providers," says Mark Hodges, chairman and cofounder of EquaTerra. 

a

It is estimated that it costs between 3 – 11% of the contract to manage multiple vendors. But the price is more than worth it versus the alternative of wishful thinking or having no measurement policy in place. 

a

For a smaller business that needs outsourcing, the key to remember is that just like your employees need to be measured, so do your outsourcing partners. 

a

Even if you’re a very small business you will probably will need to use outsourcing of some type within your business, just make sure that you give it enough of your time so that the level of service you are promised and expect, is being performed. Don’t assume anything! 

a

This can be done from simple vendor meeting setups to giving them scorecards like you may give to an employee. Treat the vendor like you would an employee; not like an outsider. You’ll be surprised at the pleasant results that you can get, and, in reality, should get.