Outsourcing

Small businesses moving to the midsized outsourcing providers

12/20/06

The Outsourcing stories that most often make the news are the big company, big outsourcer mega-deals. Even as the mega-deals have given way to mega-multisourced deals, these are the stories we hear the most about. And when these go bad, they get even more attention.

StrataVia aims to provide database administration efficiencies

12/13/06

I have received a number of e-mails from readers wondering if I will continue writing on outsourcing and how they can continue to receive future content. I am planning to provide similar content in the future from a blog or other location yet to be determined. If you would like to be informed of how to continue to get this content, please register here, and I will you know how to receive my future writings on this subject.

Frontier Airlines continues to get it right on outsourcing

12/06/06

Back in September I praised Frontier Airlines for their decision to keep their customer call center in-house. A reader recently brought to my attention that in early November, Frontier decided to outsource their revenue accounting function, which resulted in 50 layoffs. I think Frontier has exactly the right idea about what to outsource and what to keep in house.

A lesson to be learned from Black Friday/Cyber Monday

11/29/06

Back in early August I wrote about outsourcing load testing to get online retail sites ready for the Christmas season - see “Testing if your shopping site is ready for the Christmas onslaught”. Well the Christmas shopping season is upon us and the performance results are in from two of the largest online shopping days of the year - Black Friday and Cyber Monday.

Unisys perspective on major outsourcing trends for 2007

11/15/06

I recently had the opportunity to speak to Joe Hogan, Vice President of Strategic Outsourcing Programs for Unisys. He shared insight into the major trends he sees for 2007 and how these trends will play out over the next 12 to 15 months. This insight comes from discussions with CIOs from all over the world.

What’s core to your business?

11/08/06

One of the most contentious points about outsourcing can be the debate over which functions are core and which are non-core and therefore good candidates to be outsourced. Some functions are so obviously non-core that most companies go straight to finding a vendor without debating whether the function should stay in-house. One such function is translation services.

Capability Maturity Model Integration

11/01/06

The Capability Maturity Model was not widely adopted by U.S. companies outside of government or military projects even 6 years ago. But CMM and now Capability Maturity Model Integration, or CMMi, has been a strategic component of the Indian offshore companies. A testament to their commitment to quality and proof they should be trusted to build software as outsourced projects with resources half a world away.

The 'Winner's curse'

10/25/06

Clients do not win by squeezing outsourcing vendors on price to the point that they cannot deliver good results and still make a fair margin. This is a concept I have discussed in this newsletter many times and is supported in the results from a study by London School of Economics professor Leslie Willcocks.

The competitive reasons for outsourcing

10/18/06

A few weeks ago, when writing about companies shifting call center work back in-house, I touched on how outsourcing affects competition as well as the broader economic impact of jobs going offshore. Recently, I read this letter to the editor in the Fredricksburg Free Lance-Star titled “Why outsourcing jobs overseas is on my company's agenda, too”.

Business continutity plans of India's largest outsourcers put to the test

10/11/06

The largest Indian outsourcers have put significant effort behind process structure such as CMM Level 5, COBIT and other formalized approaches. They have exhibited very professional and mature approaches to IT and other business process management including very detailed business continuity planning.

Another move to value customer service: AT&T brings its call center in-house

10/04/06

It was just two weeks ago that I wrote about Frontier Airlines choosing to do its call center in-house for service delivery reasons. Now AT&T appears to be doing the same thing with the technical support desk for its DSL service. Well, AT&T did not directly say that service quality is the reason for the change from an outsourced call center, but others have speculated that it is for service delivery reasons.

A look at Unisys - now more services provider than hardware manufacturer

09/27/06

Unisys has a legacy in computing that rivals Big Blue. From the roots of Buroughs, Sperry and Rand, Unisys was formed in 1986, and has a history back to the beginning of electronic computing in business and science. Unisys began to deliver IT services in 1992, and today services are more than 83% of its $5.76 billion in 2005 revenue. This is one provider that I wanted to learn more about, so I recently spoke with Joe Hogan, VP Strategic Programs, Outsourcing.

Why Frontier Airlines' decision not to outsource its call center is a smart move

09/20/06

Last October, I wrote about mounting consumer dissatisfaction with offshore call centers. I suggested that some companies would come to the realization that they could differentiate their company through a high service model including in-house, real employee driven call centers. So you can imagine how pleased I was to see a story in the Denver Post about Frontier Airlines doing exactly that. What is even more interesting is that Frontier is considered a "low-cost" airline, and yet made a choice for higher call center costs to maintain high service levels.

GAO report highlights importance of security controls when outsourcing

09/13/06

The Government Accounting Office (GAO), a non-partisan audit, evaluation and investigative arm of Congress, recently surveyed federal and state health insurance operators to determine the extent of personal information being shared with domestic and offshore outsourcers (PDF of the report here). The results can remind us all of the security risks and controls required when sharing information with outsourcers.

Do outsourcers really know the costs of deals they have won?

09/06/06

Back in April, I discussed the issue of companies understanding their own costs in order to make good decisions about outsourcing. One reader recently suggested that I turn the tables and discuss the same issue from the outsourcer's viewpoint.

A winning outsourcing relationship

08/30/06

The Outsourcing Institute, a subsidiary of outsourcing consultancy Everest Group, is now accepting nominations for the 2007 Outsourcing Excellence Awards. Nominations can be made by the buyer or the provider, but must be made by Sept. 30. If you are involved with a great outsourcing relationship, maybe you should throw your situation into the hat.

The IRS finds that there are critics to every outsourcing deal

08/23/06

Benjamin Franklin said, "In this world nothing is certain but death and taxes.. If he were around today, perhaps he would add another certainty to that list - "There are critics to every outsourcing deal."

There are no losers when you focus on win-win situations with vendors

08/16/06

Most vendors are not out to get your budget dollars any way they can, with complete disregard to delivering value. And customers should not view vendor interactions as adversarial. Too often, the approach to managing vendors can be one of distrust, aggressive negotiation, and sharing minimal information beyond required specifications. This is no way to get the best out of vendors.

Testing if your shopping site is ready for the Christmas onslaught

08/09/06

While many of us are enjoying the dog days of summer, the last thing on most minds is Christmas. But anyone responsible for an online shopping Web site should be planning now for the 2006 Christmas shopping season.

China's grand outsourcing ambitions could be scuppered by its politics

08/02/06

China wants to be like India...a major destination for services outsourcing. A Shanghai paper recently ran a story on the 25th anniversary of Infosys, the first global outsourcing company in India. This sort of "legend" story telling is a clear sign of respect and flattery for what has been accomplished in the Indian economy. But could China's politics get in the way of its outsourcing aspirations?

Outsourcing is here to stay

07/26/06

Jack Welch, retired GE CEO, recently responded to a question about outsourcing in his weekly column Winning. The question: How can we change things in the United States so we don't have to outsource to India and other countries anymore? His response was a simple - we can't and we shouldn't.

Tips to safely outsource your security functions

07/19/06

When making a security outsourcing decision, you not only have to trust that the company can competently do the work, but you have to trust that you can trust them. After all, you are handing them the keys to the kingdom.

IVRs vs. offshore call center operators - which would you rather deal with?

07/12/06

There has been much discussion over offshore call center outsourcing. Sometimes the focus is the effect on jobs, other times the focus is the quality of customer service. I wrote about customer service issues back in October, suggesting that customer backlash from language and quality issues could cause some companies to reconsider taking their call center offshore. More recently, I have seen more customer frustration over interactive voice response.

10 reasons why small businesses should consider outsourcing

07/05/06

Mega outsourcing deals are traditionally out of reach for small and midsize businesses, but that hasn't stopped some SMBs from outsourcing certain tasks such as payroll, benefits and other HR activities. However, big technology and technical resources were historically harder for SMBs to outsource given the size of their business. Changes in the technology outsourcing market have given this sector many outsourcing options today. These changes include:

IT chargeback and outsourcing

06/28/06

Trends in IT management, such as ITIL and ITSM have pressed IT management to link more tightly to the business goals and run IT more like a business. IT managers have recently been encouraged to think like they are service providers to their organizations. One outcome of this is to have IT costs allocated to the business end users. They use the service, so they should pay for it directly as opposed to keeping IT costs as a corporate overhead cost. This is commonly referred to as IT chargeback, and it is becoming quite popular. So how does chargeback affect outsourcing?

More

Dan Twing is Vice President of Research and Consulting Services with Enterprise Management Associates in Boulder, Colo., a leading analyst, market research and IT consulting firm focusing on all aspects of enterprise management software and services. Dan has more than 20 years of experience in business process automation, distributed systems and outsourcing services. He leads the Analyst and Consulting functions at EMA. E-mail Dan.