Home Page > Publications > Attacking Outsourcing Anxiety

There's no counting the number of roadblocks on the highway to outsourcing success. I've listed a few of the key psychological barriers to outsourcing, and a brief perspective on how to overcome these cognitive hurdles.

Complexity - There's much to consider when it comes to outsourcing, but its no different than preparing for any organisational programme. There are plenty of books, and at least a few good advisories :-) out there willing to help you develop and execute a pragmatic and appropriate plan of action. If you prefer to manage it internally - treat it no differently than any other initiative - determine your goals, and create a manageable way to achieve them.

Loss Of Control - One of the more ironic ways off the road is the fear that control will be lost. Indeed, care must be taken in structuring contracts and service agreements, but as a client of outsourcers, rather than a captive of your employees, you should have more control over a service than before. Think about how long it takes to ramp up (or down) in-house teams. Outsourcing allows you to break down the inherent legal and structural barriers to fluid resource management. Additionally, sourcing agreements should be specifically structured to optimise control and management overhead. You make the decision of what stays in house and what is managed externally - so you are in control of how much control you retain.

Transition Cost - Ultimately, outsourcing is a numbers game, and any cost benefit analysis supporting an outsourcing decision will certainly include the impact of the transition - not just the cost savings achieved at steady-state. Arguably, the most valid fear in this list, transition costs should be well-accounted for as they are often much harder to accurately determine than the cost-benefit at entitlement. Additionally, you can offload as much as possible onto the service provider. While this may not save money, it will help protect you from excessive variation.

The Human Element - You have total control over what happens to your internal staff as part of your programme. First of all, "outsourcing" is not at all synonymous with "layoffs" or "firing employees". A large proportion of contracts - particularly smaller ones - are simply intended to procure skill sets and resources not available in house. Secondly, in cases where you are replacing large groups of in-house employees, work with a supplier who will take on staff as part of their service to you. Remember - a person's career is generally better supported at a company where they are line employees, rather than back office staff. A java programmer working for an IT outsourcer, for example, will likely receive more training & coaching, and they will be situated in an organisation where they have room to grow and advance.

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