Outsourcing trends

Last night’s Computer Weekly 500 club meeting in London, on the subject of off-shoring and outsourcing, provided a fascinating insight into the latest trends, from the expert perspective of McKinsey Director Paul Willmott. Outsourcing has seen rapid growth over the past two decades, and it’s still growing very fast.

What particularly impressed me was the evolving maturity of this practice. Customers are finally beginning to pay more attention to managing their supply chains properly. And vendors are now building true global capabilities, to the extent that it’s becoming hard to differentiate the global capabilities of Western companies, such as IBM, from Eastern ones, such as Tata.

Unfortunately, too many deals still fail to deliver. But there are growing “marriage counselling” services available from McKinsey and other experts. And it’s all about getting that relationship right. A bad one cannot deliver good services or security. Only the contractor has the necessary visibility and direct control needed to respond to new risks. We can’t enforce that agility through legal demands. We have to align objectives and aim to build real partnerships.  

With a looming recession, many companies will be looking to review their business plans and their supply chain contracts and business relationships to extract that extra bit of efficiency. This is the right time to try to get security better aligned with objectives on both sides of each business partnership.