7 myths about Outsourcing

If you take a step back and look at the evolution of enterprise relationships in the last years, you’ll notice how much Outsourcing has grown in all industrial sectors and became a common best practice. Internet based technlogies and information-sharing platform did certainly contributes to this gusto, enabling an increased operational and realtime visibility on off-shore relationship efficiencies and commitments.

Although Outsourcing pratices are well spread, it is far from being as easy as pie. In the last 2 months I’ve stumbled on several articles alerting on the limits of such business-process structure implementations.

The last article in date I read, called “7 myths about Outsourcing“, written on www.wsj.com by Dr. Puranam (an assistant professor of strategic and international management at the London Business School and a scholar at the Advanced Institute of Management in London) and Mr. Srikanth (a Ph.D. candidate at the London Business School) who can be reached at reports@wsj.com, was the last drop I needed to share online the risks one can incur by jumping on the Outsourcing eldorado.

I have to say the article is straightforward and pleasant to read. It even gives and suggest further readings about Outsourcing.

I’ve listed below the 7 myths you should be aware of. Do not hesitate to open the source document to get details. It is pleasant to read and worth it.

  1. You Can Have It All
  2. Outsourcing Services is Like Buying Commodities
  3. You need an Ironclad Contract
  4. Contracts don’t matter
  5. Vendors Are Insurance Companies
  6. It’s Not your Headache Anymore
  7. Your First Failure Should Be Our Last Attempt

To make a long story short, this article underlines following:

The Problem: Companies see offshoring operations as an easy way to cut costs and increase efficiency. But those high hopes rarely pan out.

Looking Closer: Interviews with a host of executives show there are seven common myths about offshoring that can be damaging to a business.

The Prescription: Businesses can draw many lessons from these myths. They must have realistic expectations when they enter an outsourcing arrangement, for instance. They can’t expect their outsourcing partners to shoulder unreasonable risk. And they must be ready to work closely with their partners to make the arrangement work.

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