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Outsourcing has gained a dominant position within large corporations. According to a recent issue of CIO Insight, outsourced resources represent now 14% of the total staff of companies with revenue over $ 1B, with half of this amount (7%) being outsourced outside the USA.
For the past 2 years, small to mid-size software companies have been embracing outsourcing, with mixed results so far, mostly because many of the current outsourcing companies work with SMBs the way they have been working with large corporations.
IT outsourcing for SMBs is an emerging and fast growing market. The outsourcing vendors that will take a dominant position will be the ones with the better ability to create approaches tailored to the challenges and goals of each of their SMB clients. It looks simple, but for most outsourcing providers, it means reengineering themselves, when not just reinventing themselves.
The outsourcing relationship between large corporations and their suppliers revolve around a process-centric approach: a sophisticated contract defining the relationship customer / supplier, various vendor accreditations (ISO, CMM, etc.), well-defined work organization and methods, etc. It certainly makes sense since large corporations have the breadth to supervise the whole process, make sure the provisions of the contract are enforced, and benchmark the performance.
SMBs do not have the kind of money and organization required to do the above. In their case, results only matter.
Because of their relatively small size, SMBs can afford a more tangible relationship with their outsourcing vendor. Contracts are still critical of course, but let’s face it; very few SMBs can afford to sue their vendor if things go wrong (or vice versa, by the way). Daily interactions at all levels are a must.
If you are a SMB contemplating outsourcing, by all means, make sure your potential partner is willing and capable of being on your side for the long haul, and ready to prove it.
What is at stake here goes beyond outsourcing. A new type of vendor/client relationship is to emerge, based on sharing risks and rewards.
