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On falling into the outsourcing trap
In response to Danny Bradbury's article on the hidden costs of outsourcing
I read your article Don't be blinded by offshore savings claims with interest as I think it highlighted a key issue related to outsourcing. With all the hype surrounding outsourcing, the one critical factor often neglected is risk.
Companies become blinkered by the short-term savings from with offshore outsourcing and forget to keep the long-term business outlook in mind.
Businesses simply cannot afford to give an outsourcer an initial brief and wait for a completed solution to be delivered, as it may have morphed into a solution which does not meet the initial requirements.
It is vital that outsourcing is sustainably cost-effective as post-delivery maintenance accounts for up to 80% of the lifetime cost, with initial development accounting for the rest.
Outsourcing can bring benefits, but only to certain companies. Its model does not suit all. Companies should "smart source", or take a thorough look at their application lifetimeÊrequirements and select the most appropriate solution to their business, rather than automatically outsourcing. Otherwise they will find themselves having to start again.
Mike Lucas, regional technology manager, Compuware
SiPA, one of the first offshore outsourcing consultancies in the UK, would like to respond to the article on the outsourcing trap.
We agree that offshore outsourcing is neither a panacea, nor a silver bullet. It is necessary, like any decision, to evaluate the pros and cons, take the necessary steps and monitor the corrective steps on implementation.
However, that more organisations have outsourced, and continue to do so in ever increasing numbers, proves the success of the concept. It is accepted as an option for serious consideration by many organisations.
Offshore outsourcing has evolved over the years and many Indian companies are into the fourth generation model. Offshore outsourcing has well passed its infancy and is constantly evolving; London Underground, P &O and BA are a few examples of early, successful, offshore outsourcing.
Apart from the cost reduction, the attractions - ready availability of skilled resources, the ability to execute a project in a short time, such as the London congestion charge - mean more and more companies are choosing this option.
Depending on the objectives of the user, outsourcing can benefit the business.
In your article on outsourcing, Alex Blues, head of offshore outsourcing for outsourcing advisory company Orbys Consulting, questions whether companies are culturally ready for such a step.
Perhaps Blues should consider whether our nation is prepared, either culturally or economically, to continue down the road that he and his company wishes us to follow.
When the bulk of manufacturing has transferred to China, and the majority of the service industry has gone to India, where does he propose that people look for employment? Does he advocate the solution attempted by French refugees from the 1789 revolution of taking in each other's washing? It did not work then, nor will it sustain us in the future.
He should reflect that if this country is reduced to an employment wasteland, nobody will be able to purchase the goods and services offered by these greedy companies, nor will people be prepared to endure a situation where a few directors and shareholders prosper while the majority live in penury.
It is time that those whose only god is profit are prevented from destroying the means by which we live.