First Post continued...

Once the outsourcing contract has been signed and engagement started, most of the clients (organizations) feel satisfied and they think honeymoon period has just started. They can relax and chill out without caring too much about the outsourced processes now...And this is when the reality stirkes.

In this particular post, I m going to mention some of the other difficulties and challenges faced by the organizations after signing the contract. Aftermath of the signatures on the outsourcing contract. :-)

First one - If a process is getting outsourced, then more often than not it involved huge change management. Wow, there you go one more process to follow which might require few more consultants to handle that. But outsourcing does involves moving staff (who are not axed) from one organization to the other. Now this can be very sensitive and difficult.

The second - on the lines of the first one, outsourcing can lead union problems. It can lead to lots of jobs moving to those locations where they can be done best, rationalization of the staff and introduction and better and efficient processes. All these 3 together can lead to lot of jobs getting axed which again is very sensitive, political and overwhelming issue to deal with. Even after signing the deal, lot of time can be lost on dealing with these issues.

The third one - These are disagreements about the type and level of service to be delivered. Even after defining SLAs, it becomes really difficult to classify a real problem into agreed SLA. Increasingly, clients are aware of this problem and hence keep some time aside for just these kind of issues. Sometimes though it involves spending more than was originally envisaged.

The fourth one - Lost of skill, control and infrastructure and this I think is the one which is the most important. Bringing the service back in-house becomes next to impossble. All the key resources would have left the organization by that time. This makes the existing vendor that more indispensable and important. This can lead to deteriorating services from the vendor. Vendor understand the equation and stops making investment in the project and project suffers.

These I think were the some of the challenges faced by the organization when they think of outsourcing a service or a function.