Ensuring Value in an Outsourced Environment

You have limited resources so you outsource a key development project to a supplier who offers the expertise and resource required to run the project which you don't have internally.  To ensure a successful project that delivers the value promised at contract and reduce the occurrence of significant delays, cost over-runs and quality issues, you need to manage the project.  But as a 'resource scarce' organisation, how do you ensure there is somebody with the right skills and expertise to manage the project from outset to completion? Or, if the project veers off track, somebody to collect and present the information required to support a claim for redress?


Most delegates had direct experience of outsourcing and of the twelve organisations attending a number use multiple outsourcers; some in multiple areas - e.g. development and support, support and testing.  Outsourcing of development is common for the delegate organisations present- usually to India, although some outsource to the US.  In general, things which are not close to the customer are candidates for outsourcing- the further from the customer the more likely it is to be outsourced.  Governance needs to be applied to four things: the relationship, the contract, the project, and the particular problem in hand.  The same approval approach is not used for each - you must govern all four not just the relationship.  "Having offshore people onshore is slightly more expensive than having permanent staff."  "When things are going badly it is difficult to maintain a partnership relationship."  "It is not just the CIO playing golf with the account director on a regular basis- you have to have interaction at all levels e.g. project manager, service delivery manager."  "They tend to cite the contract clauses more than we do."  "They can't see where you are coming from."  "Agile Development is an excuse to stop/start a project without knowing your requirements- cowboys versus Indians."

Participating Organisations

This workshop was attended by 11 organisations, representing the engineering, finance, transport, pharmaceutical, security, distribution minerals and aviation industry sectors, who combined had extensive experience in using offshore outsourcers for both development and support.  The report covers both management and technical issues in an outsource relationship, how to overcome them and make the exercise a success.

Delegate stats:

Total employees represented- 88,000

Total annual spend on IT- £763.75million

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