07.13.07

Do It Yourself?

Posted in Best Practices, Negotiations, Outsourcing, Posts at 11:28 am by Gary M. Zeiss

According to a recent article found on ZDNet UK (here), more and more U.S. companies are participating in “do-it-yourself” (DIY) outsourcing. This has caused a slow down among outsourcing consultants and law firms – all of which suffer when companies take on outsourcing themselves. What is being gained and lost in this transition?

If you have read any of my earlier posts, you will understand that I believe that the current method of doing outsourcing deals is too expensive, too time consuming and not successful enough. I still believe this to be true. That being said, unless in-house business and counsel have a good understanding of an outsourcing deal, getting professional advice still offers value to the outsourcing customer.

When a customer hires a consultant or a law firm (whatever size) to assist with an outsourcing, often the team is left relatively unmanaged to go about its work. Could this be one of the main reasons that the cost is so high? Perhaps.

Many, including this author, point out that governance is one of the key failings in outsourcing deals. I would submit also that governance of the deal process is one of the key failings in doing outsourcing deals.

So, in this short piece, let me offer the following advice to potential outsourcing customers. Manage your deal team – understand the costs, manage their efforts, measure their results. Do this with your consultants and law firms – and require them to participate – if you’re going to use them. This is the only way to get the benefit of their knowledge while maintaining a reasonable cost structure.

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