Why Benchmarking in Outsourcing is More Important than Ever

I was hurrying through the U.S. Post Office recently when a woman stopped me and asked, “How much does a first-class stamp cost?”

I paused  . . .  and then, with much embarrassment, said, “I’m sorry, but I honestly don’t know.” After another pause, I added, “I think maybe it costs 41 cents, but I’m really not sure.”

I’m just so used to seeing the “forever” stamps without a price displayed on them, and I buy them in bulk.

Funny how we get used to seeing things as they are and just accept the status quo. That got me to… Read the rest

How an Outsourcing Service Provider Lost Business

Every now and then I find out something about outsourcing that really surprises me. That’s what happened recently when I learned the status of an outsourcing relationship I’ve followed for several years. I bet the service provider in this relationship was just as surprised as I when the deal was turned on its head. 

The buyer outsourced its total IT infrastructure and application development and maintenance to a leading service provider more than a decade ago. They renewed the contract early, and they added scope. The provider achieved the targeted cost savings and productivity improvements. When I’ve talked with the… Read the rest

Second Time Around

There’s a growing recognition that an outsourcing initiative is a journey. Executives of some of the world’s leading companies have said that to me when I interviewed them about the successes and challenges in their outsourcing arrangements.

A question I’ve asked when interviewing literally hundreds of outsourcing execs is what they would do differently the second time around if they had an opportunity to start over (from the initial negotiation phase).

It’s hard to believe, but a few (very few) say they wouldn’t do anything differently and that everything went smoothly and according to plan. Many reply that they actually… Read the rest

Interview with Sand Hill Group’s M.R. Rangaswami on Cloud Computing’s Impact on Outsourcing

M.R. Rangaswami is a recognized software business expert. Prior to co-founding Sand Hill Group (known for its conferences and work in advising and uniting the software and services market) and founding the Corporate Eco-Forum, he held global VP marketing positions at Oracle Corporation, Baan Company, and Avalon Software. In 1997, he was named as one of the Top 25 Most Influential Technology Executives.

In this interview, M.R. shares his insights and opinions on the cloud’s upcoming impact on application development services.

What is driving adoption of cloud-based services?

M.R. Regardless of the hype, confusion, and complexity that seem to surround… Read the rest

Jeopardy

I’m part of a minority group. Despite the media flooding us with terrible tales and significant studies about outsourcing failures, I focus on the fact that the “pie” of the outsourcing market has a very large piece that represents highly successful relationships.

However, any relationship, whether personal or business, is bound to encounter disappointments. In my interviews of hundreds of buyers and suppliers of outsourcing services, I’ve asked about those disappointments. One that stands out to me is occurring more frequently these days as companies take on more globalization efforts.

Here’s a real-world example. In the initial contract, the buyer… Read the rest