This concise handbook offers a well-organized, comprehensive overview of the basics of outsourcing. Authors Mark J. Power, Kevin C. Desouza and Carlo Bonifazi identify the most common pitfalls in outsourcing, and offer a thorough life cycle approach to initiating, managing and terminating outsourcing engagements. Their style is pedantic in spots, but they never promised an exciting read, just a dependably solid and useful one. getAbstract finds that their brief list of outsourcing best practices deserves to be clipped and posted prominently in the office of any manager responsible for outsourcing programs, and other ongoing projects as well.
Preface and Introduction. A well balanced introduction with clear definitions of what outsourcing is all about in context with the business drivers. The strategic factors driving outsourcing are clearly laid out for the reader and show various (although not all-exhaustive) types of outsourcing models deployed today.
Defining the Problems. The book gets straight to the problem areas and defines ten of the most commonly experienced traps; it also identifies excellent context questions that must be borne in mind for any organisation that is considering outsourcing. The authors constantly prompt the reader with thought provoking questions about the internal and external factors to be considered and identify their potential pitfalls. The book also reveals the essential tasks that an organisation needs to perform in order to implement a successful outsourcing project. The details of the example descriptions are excellent and are obviously based on relevant case studies.
The Outsourcing Life Cycle. The book follows a logical methodology that mirrors the processes of a successful outsourcing experience. Also, it guides the reader through the outsourcing life cycle to provide wise counsel on how to repeat the process through attention to knowledge management, metrics, relationship management and the outsourcing management maturity model.
Needs, Assessments, Management and Relationships. The core of the book consists of in-depth assessments of what organisations need to do. The authors take you through all the steps in a logical process. It starts from the strategic view, where the business, operational, financial and risk elements are assessed. A checklist with conclusions is offered to allow an organisation to review how well they are prepared for an outsourcing project.
This section then goes on to provide checklists and conclusions for requirements of the operational needs, vendor selection, contract negotiation and management, project initiation, possible transfer of control to the vendor and the management of the vendor relationship.
The section on relationships is well covered; we particularly liked the fact that the authors do identify this area as a key factor in the success of an outsourcing project for both customer and vendor. The checklist and conclusions provide valuable insight to the importance of getting the relationship managed properly. This includes the administration set-up, communication and organisation between all parties, knowledge management, personnel management and financial management.
Continue, Modify or Terminate. The authors get this section 'spot on'. They correctly identify that "Outsourcing relationships are fraught with events that require constant management attention". This accurately reflects our own view that the signing of the contract is but a single milestone - the first step of a potentially exciting and rewarding journey, but one which needs constant monitoring, adjustment and vigilance.
The chapter identifies excellent key points that can arise in an outsourcing relationship and what needs to be carefully considered when the time comes to decide whether to continue, change or terminate an existing outsourcing engagement.
The importance of the Exit strategy is clearly emphasised and highlights how to avoid the "hostage trap" by ensuring that good contracts are implemented.
Repeating the Process. This excellent section covers the concepts of how to use and learn from the knowledge gained from previous outsourcing experiences. The chapter also explores the evolving Outsourcing Management Maturity Model, setting up a Relationship Management Office, and the use of metrics to measure the performance of outsourcing projects.
Highlighted is the fact that many organisations sequence through the outsourcing life-cycle process many times, making the same or similar mistakes again and again. The authors argue that the outsourcing process should be constantly reviewed to look for methods of improvement, and ensure that success can be readily repeated on future projects.
Best Practices. The final chapter provides an insight into the best practices used by organisations that have mastered their outsourcing processes. Eight pointers are identified which, if the reader chooses to reference them from within the earlier chapters, will highlight important parts of the life cycle that must be addressed.
This book provides detailed insight into the processes, issues, pitfalls and successes for any type of outsourcing activity. The detail and advice given in the core of the book are first class; the authors do not assume any prior knowledge of the subject matter and they provide a valuable set of customer outsourcing methodology activities. These activities should be the standard for all organisations considering outsourcing. That having been said, it is a pity that the layout of the book is not more user friendly, to match the high quality of the content; otherwise it could easily become the standard reference book of its genre.
If there is any criticism of the content, it must be that there is little scope for the reader to become aware that the selection of a vendor for an outsourcing project is more than just a 'tender type process', especially if the outsourcing model is offshore. For example, the book does not provide enough detail on the pro's and con's of choosing an offshore vendor, or an offshore vendor who might even subcontract parts of the project itself. This complexity of vendor assessment was not highlighted and many organisations do get it wrong. This can often lead to a subsequent change of vendor, which is both costly and damaging for both parties. If the requirements are gathered and the selection methodology performed correctly in the first place, expectations of both parties are more likely to be met and future reselection perhaps avoided.
Whilst Chapter 9 does provide excellent arguments to continue, modify or terminate an outsourcing relationship, we feel that this information could have directly referenced the equally excellent Chapter 1 "Ten Common Traps of Outsourcing". Doing so would have presented a powerful insight into how important it is to make the correct key decisions at the start of the outsourcing project - they will have dramatic implications later on when it's time to review whether to continue, modify or terminate the relationship.
In summary, this book is a potential 'must read' for any organisation which is either contemplating or engaged in outsourcing activities of any kind.
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