Why One Outsourcing Provider Is Not Enough - InformationWeek

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Why One Outsourcing Provider Is Not Enough
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JessicaL206
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JessicaL206,
User Rank: Apprentice
1/16/2014 | 12:26:31 AM
Nice thought
I dont know anything about outsourcing, but this article give me a piece of thought to grow my business, in order to make ot bigger and efficient, outsourcing is a great idea

Royal Jelly
felixlgriffin
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felixlgriffin,
User Rank: Strategist
11/30/2013 | 1:29:21 PM
Re: With Personnel Maybe..
I think J_Brandt and Tom Murphy make great points. I also feel that the matter of outsourcing will hedge upon the needs of the organization and project interaction. I can't imagine a non technical person managing a project with more than one outsourcing provider.. This is where managing the issue of "complexity" as Shane mentioned comes into play.

Ideal situation: You have a Personnel in place who will be somewhat of a manager or consultant and contract out to one main Lead Outsourcing Provider who may subcontract certain areas of the project to another provider. Maybe that's just wishful thinking.

I don't think Mr. Staples' position [as Co-Founder and President of Mindtree] or association is a conflict of interest at all. I have no association with Mr. Staples and I found the commentary to be informative. I am a supporter of Domestic (Onshore) sourcing and Rural Sourcing, but I must admit that "Outsourcing" to India and Mexico in regards to IT Services and Web Develpment are cost effective and project effecient. We live in a Global Economy and if you are going to be a viable entity of any sort, yu must think Global. Regardless of your IT or Business decision, you must think of the best way to manage resources and deploy technology both effectively and efficiently. 

Overall I applaud Mr Staples and I think everyone must agree that "companies need to consider how outsourcing, offshoring, nearshoring, onshoring, and insourcing all play together in the right mix to get maximum value."
Questor
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Questor,
User Rank: Apprentice
11/26/2013 | 4:24:52 PM
Author has "conflict of interest" issues...
The Information Week IT outsourcing commentary listed above by author Scott Staples does not disclose he is the President of Americas for Mindtree – a large IT offshore outsourcing company based in Bangalore, India. 

 

What is Staples trying to do by authoring that Commentary and not disclose his personal financial bias in favor of IT outsourcing?

 

However, Staples does show ethical concerns regarding why he has not disclosed his probable "conflict of interest" issues.

 

Staples stands to benefit financially if his Mindtree company branch gains any business from his pro-outsourcing Commentary.

 

Here is his undisclosed self-bio found through website links:

 

Scott Staples is the Co-founder and President, Americas at Mindtree. Scott brings over 24 years of experience in IT consulting and client management. As President, Americas, Scott leads the strategic transformation of Mindtree as a global service provider.
ChrisMurphy
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ChrisMurphy,
User Rank: Author
11/26/2013 | 9:14:40 AM
Re: Multiple throats to choke come with a price
That's a great point. At GM, when it went to multi-vendor strategy, it tried to enforce certain processes among those vendors for doing 40-some IT tasks -- so it was done the GM way, not the HP, IBM, Wipro, etc. way. That's a complicated endeavor, and one that's probably impossible unless you're an outsourcing customer like GM with something like $3 billion a year in outsourcing spending to entice the vendors.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
11/25/2013 | 10:04:52 PM
Multiple throats to choke come with a price
Nearly every IT staff wants to avoid too much dependence on a single vendor. And nearly every staff knows that multiple suppliers come with a learning curve, data integration and complexity price tag attached, however strong the logic. Do those "towers" look anything like silos?
ChrisMurphy
IW Pick
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ChrisMurphy,
User Rank: Author
11/25/2013 | 5:44:55 PM
Re: With Personnel Maybe..
General Motors was the biggest example of a company going with a single outsourcer, relying on EDS for 10 years almost exclusively as part of the deal to divest EDS. But its CIO, Ralph Szygenda, sprinted to a multi-vendor approach as soon as he was able, in large part to gain better negotiating leverage. A number of companies who tried "one throat to choke" outsourcing deals in the mid 2000s unwound them. But some companies, like P&G with HP, seem to remain comfortable putting a majority of their IT operations with one big vendor.
Tom Murphy
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Tom Murphy,
User Rank: Author
11/25/2013 | 4:54:59 PM
Re: With Personnel Maybe..
Jeff, Shane: Funny, I had the opposite impression. I thought the benefits of risk mitigation were so obvious that spreading your sourcing around was a no-brainer. Imagine any of these scenarios:

a. A manufacturer it completely dependent on one source for, say, memory in a new smartphone. And the supplier is hit by a devastating monsoon that shuts down production for six weeks. Too late to scramble for alternate suppliers, but if you have one or more in place, you can see if each can ramp up production to offset the shortage.

b. All your phones are manufactured in one fatory in China -- and it is destroyed by a fire. If you haven't got another supplier set up, tough luck.

c. You have all your defense companies records secured in your ultra secure datacenter. One day, you arrive to find foreign-government hackers have destroed valuable records. Got a copy stored in the cloud?

Don't all three of those cases make the cost worthwhile?
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
11/25/2013 | 4:21:08 PM
Re: With Personnel Maybe..
That's a good question Jeff. Is the complexity of managing multiple providers worth the potential cost savings and risk-reduction of spreading out your outsourcing plans?
J_Brandt
IW Pick
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J_Brandt,
User Rank: Ninja
11/25/2013 | 4:05:13 PM
With Personnel Maybe..
I might agree with this more if what you are outsourcing is purely personnel needs.  But even then, the complexities of managing multiple organizations may quickly chew up any savings you get.  I think it comes down to the actual personnel needs or project interactions.


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