Outsourcing changes as the crisis bites

Report from IAOP Global Outsourcing Summit 2009, Carlsbad, California #4 As companies expand the scale and scope of their outsourcing, their expected and achieved savings tend to decline until and unless they get to a high scale and scope because they tend not to put in the necessary infrastructure and strategy until and unless they acknowledge and act on the commitment to high scale outsourcing. A trend of recent years towards setting up captive offshore capabilities has shifted to engaging service providers and sales of captive providers.  This includes Private Equity investors setting up "portfolio captive" capabilities to provide "shared services" to various, otherwise unrelated companies in their portfolios. Contracts are coming under much tighter scrutiny as clients look much more closer at performance management and how, if at all, they can squeeze their vendors on performance to get more for the same money or the same for less money. The conclusion that I draw from this for DCG is that our software metrics, benchmarking and function point counting services will all be in greater demand over the next year or two. More sourcing centers of excellence are emerging. There is increased pressure on service providers to increase efficiency AND reduce rates and ther is evidence that service providers are responding. There is a much stronger focus on improving process efficiencies and on capabilities to manage outsourcing and off-shoring. There is evidence for increasing importance of off-shoring as an engine for company growth but there is also evidence for discretionary projects and being canceled or postponed. More details and some good charts of the results  can be found in Shared Services Outsourcing News article: Outsourcing Survey Results

Written by Michael D. Harris at 01:40

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"It's frustrating that there are so many failed software projects when I know from personal experience that it's possible to do so much better - and we can help." 
- Mike Harris, DCG Owner

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