Hard Outsourcing Questions

Mark Mullaly is president of Interthink Consulting Incorporated, an organizational development and change firm specializing in the creation of effective organizational project management solutions. Since 1990, it has worked with companies throughout North America to develop, enhance and implement effective project management tools, processes, structures and capabilities. Mark was most recently co-lead investigator of the Value of Project Management research project sponsored by PMI. You can read more of his writing at markmullaly.com.

Outsourcing as a phenomenon has had a banner decade. Since coming to the fore in the 1990s, it really hasn’t gone away. If anything, it’s become more widespread and ubiquitous as organizations seek to increase efficiency, reduce costs and focus on their core capabilities.
 
The question that should be asked, however, is: “Has outsourcing delivered the value that everyone expected?” Just as difficult a question for many that have outsourced, however, is “How would I be able to tell?”
 
There was a time, within this author’s memory, when an ongoing, slightly cynical observation in IT circles was: “No one ever got fired for buying IBM.” These days, the recurring argument seems to be: “No one ever got fired for outsourcing.” Not only are maintenance and support responsibilities like network operations or applications maintenance being outsourced, it is now commonplace to see entire business functions being contracted to outsource firms.
 
From the perspective of the outsource firm, the logic and appeal of this arrangement isn’t hard to understand: Every outsourcing contract represents a stable, long-term and ongoing source of revenue. From the perspective of the customer, however, there are some essential questions that should likely be asked well in advance of deciding whether or not …

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