Can you outsource too much? (Part 1)

Your perspective can influence the answer.

If I come from a service provider, I might like to tell you that I can do just about anything so you should feel confident to outsource everything to me.

If I'm someone who might lose my position, I might like to tell you that almost nothing can be outsourced--at least nothing related to what I do.

If I'm in a senior management position where I perceive an area to be a problem or something I don't understand, outsourcing the entire area can be way to get rid of that problem.

If I'm trying to drive a big change in the organization, I might believe that a good first step is to "get rid of everything" and then start again.

If I have to manage a set of outsourced services, then I might believe that there are some things that don't make sense to outsource (at least to the same service provider)--specifically the management of the outsourced services. This is an area that many companies underestimate in terms of both effort and importance for achieving their objectives when they outsourced.

If I'm someone who thinks in terms of "core functions", I might argue that some functions are "off limits" for outsourcing. However, that may not help that much in terms of where to draw the boundary for those areas that are not "off limits".

With so many perspectives, how do you bring them all together? Food for thought for a later blog.

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Michael Rehkopf

Michael has more than 20 years of experience in operations, strategy and sourcing covering all major parts of the globe. He has also worked for Australian, Canadian, German and Japanese companies in both business process outsourcing and IT outsourcing.
Michael's industry experience includes the financial services, manufacturing, telecommunications and travel sectors. He leverages this diverse industry experience and his university background in accounting, IT and his Master of Dispute Resolution, to assist clients in the development of business strategies and the implementation of sourcing strategies. These include the associated evaluation, negotiation and organizational change.
Michael is currently a partner at TPI, the world's oldest and largest sourcing advisory firm. Prior to joining TPI, Michael held leadership positions with Siemens Business Services, OpenPlus International, Mitsubishi Electric and Netron.