Outsourcing And What You Can Learn From Previous Insourcing Experiences


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When dealing with outsourcing, you know how complex it is. So you want best-practices. Unfortunately there aren’t too many around.

But isn't there another experience you might learn from?

Yes. Insourcing. That is what we have been doing a lot in the past. And still.

The make-buy-or-outsource-decision is very well documented. We are in the trend where MAKE is still replaced by BUY. So there are many packages you can buy at any level (of which ERP – Enterprise Resource Planning and CRM – Customer Relationship Management are the most “important" ones).

What was this experience? Besides the fact that many projects exceed time and money targets, these organizations have learnt that tailor-made-solutions are no longer present. They are replaced by a market standard. Yet there are many standards. There are four to five main suppliers in each area, so there are (talking about largecaps) about five solutions to choose from.

How did you make that choice in the past? An important feature of this insource process is that external resources are doing the job. They have built the system (although it was finished when you bought it). So basicly, those human resources are to cooperate with you internal human resources.

How do these resources match? The fit between the external company and your internal organization is one of the critical success factors. Rather than the solution itself, you are dealing with external resources that are implementing part of your process. All by means of the package.

Once you have bought the software package (ERP, CRM) it is no longer about the solution (only) but about the characteristics of the resources of the supplier. How well do you get along with each other? What principles do they apply and how do these rules match with your own organizational values?

If you have dealt with these kinds of insource projects, you have already faced a big deal of outsourcing (and its complexity). A simple assessment on style differences between your companies will help speeding up the process. The sooner you are aware of these differences the better.

© 2005 Hans Bool

Hans Bool is the founder of Astor White a traditional management consulting company that offers online management advice. Astor Online solves issues in hours what normally would take days. You can apply for a free demo account


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