If outsourcing works, as is claimed, then why is it, as Simon Caulkin pointed out in the Observer yesterday that about two thirds of all outsourced IT contracts have been bought back in before the contract term finished?
Could it be that the distance that outsourcing creates is counter-productive?
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Off-shoring and out-sourcing are not the same thing! Much of the outsourcing that Caulkin discusses stays in the country: a lot (if not most) public sector outsourcing (which he admits is a major problem area) does.
HSBC’s heavy off-shoring has given it higher customer satisfaction than, for example, LLoyd’s on-shore operations: http://www.checkmyfile.com/content/downloads/2006%20Banking%20and%20Credit%20Card%20Survey.pdf
, probably because of the quality of the staff they are able to hire. On this subject see the anonymous comment on my response to your previous post on the subject.
Graeme
I agree, outsourcing is not the same as offshoring. But both break essential human relationships, and therefore have their limits.
It would be quite wrong to say either was always an incorrect course of action. But they’re not panaceas either. As generic solutions to business issues they’re non-starters. Management remains key.
That’s my point.
Richard