Is the economy impacting outsourcing relationships
While there are opportunities in outsourcing and offshoring to businesses under pressure to cut costs and stretch slimmed-down budgets, that opportunity is accompanied by an additional level of complexity, said a PricewaterhouseCoopers LLP executive.
In the IT world, especially, outsourcing and offshoring models have become extremely mature with time, said Madhav Murti, a vice-president specializing in offshoring and outsourcing advisory services with the Toronto-based professional services firm. But in tough economic times, he said, new complexities like service provider viability must be considered when implementing these models because "now the level of risk has gone up so much."
"What is happening is, any company looking at an outsourcing relationship is dealing with a provider environment which is extremely volatile," said Murti, listing diminished business, access to credit, and stock market pressures as factors brought on by the weak economy.
Given those various impacts, businesses considering a new outsourcing relationship should first evaluate the service provider, said Murti, given "the diligence of the service provider goes up probably fivefold because you can no longer just look at their financial viability."
