6 Reasons not to Outsource

If you’ve seen the movie Frozen or heard its hit song, then you’ve had a musical taste of the triumph Queen Elsa feels after she decides to “let it go.”

I can’t be 100% certain that this song was written about outsourcing, but hear me out…  

 

When you Don’t Worry, you can Be Happy

You may feel like singing, too after giving someone else the privilege of doing your tax preparation, mowing your lawn, or changing the oil in your car. For your organization, it can be equally joyous to find the right partner for accounting, product fulfillment, or QA testing.

When you buy rather than build, you let it go. The right outsourcing arrangement transfers more than work from the buyer to the seller. It also moves worry off the plate.

But – as we also see in the movie – not every story ends the way we hope.

 

When Outsourcing is NOT the Right Call

Here are six clues that outsourcing is NOT the right decision. Don’t let it go until you uproot any items on this list:

 

Reason 1 – Vague Goals and Metrics

When you cannot clearly define the desired outcomes and how to measure them, bringing in a partner is more likely to add confusion than to clarify. The best outsourcing engagements are where the client and vendor have the same, clear answer to the question “How will we know we are successful?”

 

Reason 2 – Lack of C-level Commitment

If the executive team thinks outsourcing is a bad idea, then outsourcing is a bad idea. The engagement is likely to be a self-fulfilling prophecy, whether good or bad. The sponsors need to budget for a few bumps and be committed to the path.

 

Reason 3 – Lack of Operational Support

A middle manager can sink a promising initiative by holding back key knowledge or resources. When the company is forced to side with either its employees or an outsourcing vendor because the two are fighting, there is no good answer.

 

Reason 4 – Low Confidence in the Chosen Vendor

If you can’t find a partner you believe in, it’s better to keep looking (or stop looking) than to move forward with skepticism and expectations of mediocrity. Partial adoption and excessive hedging will make success less likely. (Again… that self-fulfilling prophecy rears its head.)

 

Reason 5 – Excessive Switching Costs

For the long-term health of an outsourcing project, it’s important for both parties to have good options. This relationship isn’t a marriage; you should understand the process and cost of disengagement and taking the function back in-house or to another vendor. That cost may be high; you just don’t want to feel trapped.

 

Reason 6 – It’s What You do Best

The list of things your company does better than anyone else should only two or three items on it, at most. But when you find that true list, you have found the activities that other companies should be outsourcing to you. When you hit the core, keep it inside.

 

A Word of Caution

In my experience, companies are much more likely to under-partner than to over-outsource. That’s why “We can probably do this ourselves” is an Expensive Sentence. If you want a gut-check about whether you are using a good reason or a bad excuse, give me a call and let’s talk about it. 703.944.9676. (By the end of the call, we may be singing like Queen Elsa.)

 

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