Outsourcing Risk Reduction: How to Avoid Disasters and Ensure Solid Working Relationships

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With the right outsourcing arrangement, you can convert fixed IT costs to variable, gain access to scarce resources and increase service availability. But you need to manage outsourcing risks.

Today, more and more businesses understand the benefits of working with outsourcing companies. Although having a business relationship with an outsourcing vendor can be a smart move, it is important to minimize the risks associated with this type of business partnership. The recent ExecutiveBrief article on outsourcing risk reduction provides useful in-depth suggestions on making good outsourcing decisions.

Why Outsource at All?

Without a doubt, the most important positive aspect of working with an IT outsourcing company is the ability to save substantial money. Cost reductions occur because outsourcing vendors usually spend less on both labor and overhead. For example, offshore outsourcers typically enjoy lower energy costs than onshore vendors," says Darin Stahl, Lead Analyst for Info-Tech Research Group. Stahl believes that successful outsourcing engagements must yield savings of at least 15% to 20%. And enterprises should avoid contracts that can't deliver a minimum savings of 10% in headcount and technology costs, he says.

Read the full article here: Outsourcing Risk Reduction: How to Avoid Disasters and Ensure Solid Working Relationships.

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