Downfalls in Outsourcing

Filed in archive Outsourcing Advisors on August 24, 2006

Do you know why most outsourcing deals go up in smoke? Well, maybe because most outsourcing companies are mostly interested in the cost-saving aspect thus disregarding other relevant details of the outsourcing deal.

The research firm Gartner recently identified the 5 major downfalls of outsourcing/offshoring thus explaining the different reasons on why most outsourcing transactions are cancelled. These are the reasons mentioned:

1. Ignorance of Hidden Expenses
2. productivity Loss
3. Inadequate communication and commitment
4. Cultural Differences
5. Absence of Offshoring/Outsourcing knowledge and preparedness

Firms that are thinking of outsourcing should first and foremost take note of these downfalls and make sure that they would not repeat the same mistake in their outsourcing deals.