This is the second year of an annual forum for all participants in outsourcing – vendors, CIOs and their corporate peers and the legal and management consulting communities who advise all of the above. The objective is to understand trends in outsourcing, share best practices and to develop better ones.
It’s clear that, while there are significant outsourcing deals taking place in Canada, it’s not moving as quickly as in the U.S., and the issue of offshore outsourcing has certainly not become as controversial and politicized here.
Canada currently benefits from offshore outsourcing – or more popularly, “nearshore” sourcing – with hundreds of thousands of jobs created here, most notably in call centres. We benefit from cultural and language compatibility and geographical proximity, as well, of course, as a currently favourable exchange rate and salaries. Canadian expertise in IT is recognized, and there are some examples of U.S. projects being undertaken here, managed locally, and also taking advantage of favourable offshore rates in India, for example, for some development activities. Some of the things I picked up from the conference sessions…
– As in all things, managing expectations is a critical upfront and ongoing requirement.
– A prerequisite to the last point is one that came up many times: before outsourcing any function or process, it’s imperative that you understand the current costs and performance of those activities. If you don’t know that, then it’s impossible to know whether you have a good outsourcing deal or not, and impossible to recognize or measure improvements. If you don’t know, then figure out a way to measure before entering negotiations. A competent and desirable vendor partner should insist on that anyway.
– Relationships matter. Not just the relationship of the principals involved in negotiating and managing the ongoing engagement, but also the relationship between operational personnel. Try to assess the cultural fit of the two organizations as part of the vendor selection process.
– Get references from other clients of the vendor; preferably organizations similar to your own.
– Recognize which people are likely to be transferred as part of the outsourcing agreement. They would not be the best choices to be part of the negotiating team since their loyalties might be confused.
– No consensus on this last point, but a majority favoured as open a communication as possible with all staff throughout the process. HR issues can be tricky, but experienced vendors should be able to provide guidance.