The Other Four Misperceptions of Outsourcing

Almost six months later, part 2 of this Gartner podcast arrives. Linda Cohen talks about the second four of the eight myths:

  • the myth of sourcing independence;
  • the myth of service autonomy;
  • the myth of economies of scale;
  • the myth of service management as self-management;
  • the myth of the enemy (i.e., setting up the vendor as an adversary);
  • the myth of procurement;
  • the myth of steady state; and
  • the myth of sourcing competency.

Good discussion, especially on how procurement needs to get a better handle on how to negotiate long-running services contracts in a non-adversarial way (myths 5 & 6). As a long-time service provider, I know how important it is that you start a contract with both parties not feeling like they just got screwed, because that can damage the relationship for months or years to come. Organizations that are used to using a heavy-handed approach with product vendors might want to consider that they’re now negotiating with another company that is going to become an integral part of their operations for a long time — the mentality needs to be more like hiring an employee than buying a product.

Myth 7 (steady state) is also interesting, although pretty obvious: business changes, and the relationship between an organization and its outsourcer needs to be able to adjust accordingly on a fairly regular basis.

It’s probably worth going back to the podcast covering the first four myths and listening to them together.

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