The Truth About Outsourcing:
how to make vendors work for your shareholders

Abstract

Many executives look to outsourcing to save money, improve performance, and spend less time worrying about a service function. In reality, the promised benefits rarely materialize.

Paying vendors a profit turns out to be surprisingly expensive. Outsourcing contracts are often tough to manage. And vendors can never be as well aligned with business strategies as insiders.

However, there are cases where buying is cheaper and better than making products and services internally. The question is how to utilize outsourcing vendors without becoming hostages to people who serve other shareholders.

The best solution is for staff to become the "vendor of choice" by addressing the root causes of outsourcing -- dissatisfaction with internal service functions. Then, staff can utilize vendors as part of their organization (termed "extended staffing") whenever they offer a better deal.

This presentation cuts through the hype and explains why most outsourcing vendors' claims are hollow, delineates the real reasons executives explore outsourcing, and explains how staff can address these legitimate concerns and incorporate vendors into their delivery strategies.

Outline

* Vendors' claims, and the fallacies in them

* The real reasons for outsourcing

* How staff can fix the problems that motivate outsourcing

* The fundamental trade-offs: staff versus vendors

* How to get the best of both worlds: the "extended staffing" strategy

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