Outsourcing, Insourcing and Rightsourcing: Which Way Do You Go?
By
Steve Murphy
Senior Consultant
Outsourcing non-core processes in the ‘80s didn’t work for you, so you
insourced in the early 21st century. That didn’t work out so well
either, so now you are looking to rightsource.
Outsourcing, insourcing, rightsourcing…are these business options really
more than buzzwords and consultant-speak? For any of these sourcing
options to work, the organization has to understand the strategic nature
of the decision. The most successful sourcing strategies work when
they’re done for the right reasons (process improvement, cost savings,
increased service efficiencies), for the right tasks (software
development, IT infrastructure, accounting, scanning, indexing), and at
the right time (increase market share, corporate strategy shift).
Many organizations get caught up in the hype of the outsourcing/insourcing
craze and forget that it is a complex business strategy. Lack of a
strategy or top-level management commitment and failure to dedicate the
best and brightest internal resources to the project will lead to
sourcing disasters. Organizations that take a one-dimensional approach
to a sourcing decision, such as a sole focus on saving money, take a big
risk that could have long-lasting implications. The ideal process is to
develop an organizational strategy, create an outsourcing framework, and
seek professional help to handle the implementation and select the right
match.
Successful organizations first understand the process that is being
outsourced/insourced. They understand the critical drivers; the
deliverables; and, most important, the main customer expectations.
Rather than handing off a poorly functioning process, they strive to
stabilize and perfect the process first in order to maximize the value
of the relationship.
These organizations stay engaged with the process even though their
employees are not performing the tasks. It is critical that the sourcing
organization:
