Outsourcing: Too Good to Be True?

Andy Jordan is President of Roffensian Consulting S.A., a Roatan, Honduras-based management consulting firm with a comprehensive project management practice. Andy always appreciates feedback and discussion on the issues raised in his articles and can be reached at [email protected]. Andy's new book Risk Management for Project Driven Organizations is now available.

  Outsourcing   Procurement Management   Resource Management  

I know a few executives who absolutely refuse to consider outsourcing to help their business. A couple of them will offer lengthy explanations as to why using very colorful language—they have had terrible experiences with the concept. Frequently, those experiences have involved promises of significant cost savings that simply haven’t come to fruition, and the executives have felt duped by less than scrupulous vendors.

Yet there is still a healthy industry in outsourcing, and you don’t have to look too hard to find vendors in many different areas who promise significant savings simply by partnering with them—whether those are onshore or offshore partners. So what’s going on here? Is the industry full of unscrupulous players? Do I just associate with executives who don’t know what they’re doing? Or are things a little more complex than that?

Let me start by saying I am a big fan of outsourcing—it’s part of my business, after all—but I also recognize that not all outsourcing vendors tell the whole story when pitching for contracts. Headline promises about halving turnaround times, halving costs and doubling quality may well happen in some circumstances, but certainly not in all.

Further, those are the gross savings; they will be eroded by the costs of outsourcing for the client organization. It is those internal …

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