Top Three Outsourcing Initiatives for 2009
It is a good time to look at outsourcing as a means to cut costs, launch new business ventures, and improve efficiencies.
It is not a stretch to presume most people were happy to see 2008 come to an end, yet most analysts and experts predict 2009 is going to be worse. As we stumble into the New Year, executives are challenged with the cyclical routines of planning, budgeting, forecasting, and so forth. It is hard enough to do these tasks in normal times, but it becomes a nightmare in the uncertain economic environment we live in now, but outsourcing can help.
Given this uncertainty and chaos, it is a good time to look at outsourcing as a means to save money, propel new business ventures, and improve efficiencies. It is also a good time for CIOs to review, rationalize, and evolve their outsourcing programs. In light of this, the top three outsourcing initiatives for 2009 include:
1. Reviewing Deal Structures
Most current outsourcing deals and models are outdated and ineffective because they are people-based and not demand-based. Companies have a need for resources to do the work that is required; they negotiate a rate with a vendor; and determine contract durations. The contracts primarily follow a simple model: People x Rates x Duration.
It is easy to understand why a people-based model is being used today, since outsourcing (especially Indian outsourcing) grew out of the Y2K era. Companies first engaged outsourcing companies in staff augmentation models to address their Y2K needs, and hence, all subsequent outsourcing models have been people-based. While outsourcing companies have grown in leaps-and-bounds over the past three to five years in terms of their capabilities, there has been little evolution in deal structures.
