To Outsource or Not? To Be or Not to Be

People who ask this may not suffer the same torment as Shakespeare’s famous protagonist Hamlet.  But this question kept coming up at the CWS Summit in San Diego last month: Should I outsource my MSP or manage it in-house?

So much has been written and spoken on this topic  but here’s the quick answer: It really depends on your company, its culture and size of the program. And I know that answer is frustrating to many of the folks who are grappling with what to do as they understand this space. As one attendee said, we know the pros of the many variations of the models as we are always being sold on that. What are the cons? Here’s a quick overview of the cons associated with both models. You can compare them. Next week I will highlight the pros.

Outsourced In-house
Failure to adapt to client culture, clash with hiring managers Lack of client base to share best practices and often no real program vision as contingent workforce management (CWM) is not the company’s core competency
Program staff turnover, unable to grow staff and skills on A/C. CWM is just one aspect of the manager’s job, who so often is spread thin. The manager may run into problems with resource availability and skill alignment
Reacting rather than leading with trends, new developments Supplier mismanagement as the client often does not get the vendor mindset
Increasing spend under management can take precedence over customer’s business objectives for the program Undervaluing contingents. They could be your employees tomorrow, stop treating them as an necessary evil
Executive sponsor turnover can interrupt an MSP’s progress Executive sponsor turnover can impact momentum of program

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Frank Troppe10/04/2012 01:44 pm

Good chart showing the Cons. I look forward to your blog next week on the Pros!

Project One

Gary Zander10/02/2012 03:05 pm

When asked what their most critical challenges to growth are, 3/4 of CEO's cite their ability to attract & retain top talent for their organization. In today's environment, the contingent workforce is an important and growing portion of that talent base. Therefore, while it might make sense to outsource other generic or commodity functions, all-things-people should be controlled and managed in-house. It's just too strategic a function to outsource... even to the highest bidder!

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