What can you expect from this book?
Anyone can outsource. You can hire a man off the street and ask him to outsource any service in your company for you. All he has to do is ask for three quotes, see which one is lowest priced, see which way you are leaning, and sign on your behalf whatever contract is put in front on him.
Obviously, this is not good outsourcing. And, in no way is it even close to best practice.
The gap between outsourcing well, outsourcing well enough, and just outsourcing is vast. It can make or break your company - as we have seen in hundreds of cases that we have worked on.
With sufficient experience most people do get to the stage of outsourcing well enough relatively quickly. Yet there remains a vast gap to cover as shown in the table below.
There are a few 'buzz words' in the table above which I will soon explain with simple examples.
Think of outsourcing as a journey.
In the first stage most companies merely look for someone to do the job cheaply because they have access to cheap labour, or some other cheaper input. Perhaps your company has to pay union wages, and your cleaner does not. Perhaps your contract manufacturers in China pay lower wages to assembly line workers. The list goes on.
In the second stage, it is not just about the cost any more. It is also the case that your outsource service providers has specialised in something which is not your core competence - such as IT, or logistics, or call centres.
In the third stage, you actively engage with the vendor to co-develop capabilities that neither of your two companies possess individually. That is the holy grail of outsourcing - rarely encountered, but highly profitable.
Look at the figure below that illustrates this concept: