Introduction

The analysis in this book has focused on planning, implementing and managing services outsourcing arrangements, and has shown that services outsourcing involves a range of issues including continuous improvement, change management, stakeholder management, knowledge management, information technology, contracting and performance management. Outsourcing services to foreign locations includes a number of additional concerns such as language, culture, service quality, political factors, time zone and company reputation. The book has highlighted the difficulties and risks, as well as the reasons for failure. The complexity of services outsourcing means that failure is likely, and, of course, failure cases will generate more headlines than successful outsourcing. In spite of outsourcing failure, there is no discernible trend towards organisations bringing processes back in-house during or at the end of contracts. Indeed, the drivers of services outsourcing such as corporate restructuring programmes, developments in information and communication technologies (ICTs) and more demanding consumers will continue to operate. This chapter summarises some of the key challenges of services outsourcing, and outlines key aspects of effective services outsourcing based upon the analysis presented in the book.

Challenges of services outsourcing

Conflicting incentives

A difficulty at the heart of any outsourcing arrangement is the conflicting motivations of the client and vendor. A key objective of the client in outsourcing is to obtain a service at a lower cost from the vendor. The aim of staff in the client is to demand more services from the vendor without having to pay more.