Making The Outsourcing Decision

Kelley, Michelle; Jude, Michael
December 2005
Business Communications Review;Dec2005, Vol. 35 Issue 12, p28
Trade Publication
The article presents information on five cost components to be kept in mind while evaluating outsourced solutions. The five components : process, contracts, communications, quality and change can materially affect the outsourcing decision. The organization should analyze the documented process carefully and identify possible improvements. The hidden costs of incomplete process knowledge can be combated by including process documentation. Inappropriate accounting of contract costs by organizations can skew value assessment, therefore the organization should invest time and resources to ensure tight control of the contractual aspects of outsourcing. The employees and customers are the ones affected by the outsourcing decision, therefore their input is crucial to the process documentation effort, which is instrumental in defining the outsourcing scope. The organizations should establish a mechanism for feedback and open discussion. The psychological factors involved in outsourcing should be addressed by the organization. According to outsourcing consultant Martha Young of Nova Amber LLC, the organizations must prepare employees affected by outsourcing for their next job or career.


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