What are the disadvantages in an outsourcing relationship?
Outsourcing has been with us for years and is likely to stay, but along the way there have been missteps that have tarnished the benefits of outsourcing. Outsourcing dissatisfaction for organizations can be attributed to the following: • An organization’s loss of control in the outsourcing relationship. • Cost overruns from the outsourcer. • Outsourcer is inflexible to the organization’s changing business needs. • Lack of consequences for the outsourcer for poor performance. • Locked-in commodity pricing where the market pricing is falling. From the outsourcers’ point of view there may be dissatisfaction in the arrangement as well. • The customer wants “out of scope” services “in scope” without paying extra for them. • Locked-in manpower pricing where the market rates are rising. • The customer’s key management changed and so did the size of the outsourcing arrangement. • The customer is not paying its bills. • Inability of the customer to make timely decisions. Fortunately, we have th
