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Companies and their outsourced partners have different and sometimes competing goals and
objectives. As will be discussed later in this chapter, there are different business models for structuring
the relationships between the two companies. Typically, the outsourcing provider wishes to make
money, while the company contracting for the services wants to save money yet demand a highquality,
reliable product or service. How does one reconcile these differences while creating an
effective business relationship that satisfies both parties?
Once a function or process is moved out-of-house, the potential for loss of knowledge and the
reliance on others can become a concern. What if the company responsible for providing the
outsourced functions were to go bankrupt? The outsourcing company might no longer have the
internal skill set to take the outsourced function back. If it is a software project, every time a
modification needs to be added, will the company have the institutional knowledge to make it on its
own or will it be crippled?
Determining Success
The distinction between domestic and offshore outsourcing has become somewhat blurred. Even some
domestic outsource providers have facilities in offshore areas. Some work might be performed in the
United States and some performed offshore. Offshore outsourcers such as Wipro and Infosys have a
70/30 model whereby they provide for 70% of the work offshore and 30% on-site in the United States,
which, at a minimum, helps to prevent communication issues.
Successful projects tend to be those that have well-defined requirements. Drafting requirements on
the back of a napkin is no longer sufficient. Any outsourced project or service demands firm, welldefined
specifications that ultimately become part of the contractual relationship. In software projects,
those with less integration and fewer dependencies on other internal systems tend to be more
successful. Boundaries between systems tend to create the most difficulties. Having few touch points
between the system being developed and existing systems helps to guarantee the project‟s success.
Call centers providing customer and technical support have been a major area where companies
have had success outsourcing. While, as discussed previously, consumers perceive a quality difference
in the service between domestic and offshore call centers, many of the Indian call center providers
now train their employees to speak English without an accent. Offshore call center employees are
provided software to diagnose a problem that is identical to the software used in domestic centers.
Still, there is a cultural difference that sometimes aggravates consumers. Many feel that the service
offered is inferior to that provided domestically. To make it work, call center providers must create
better experiences for consumers. Many companies are providing better training and expert systems
for their call center operators.
Outsourcing a Process or a Project