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Founder and Chief Executive Officer of HfS Research, the leading global research analyst organization covering global sourcing strategies. Acclaimed Industry Analyst and Consultant who scribes the leading blog for the services industry "Horses for Sources".  Previously worked  at AMR Research (Gartner Inc),  Deloitte Consulting’s BPO Advisory Services, the  Everest Group and  IDC .  In 2010, Phil was named “IIAR Analyst of the Year” by the Institute of Industry Analyst Relations (IIAR). This is the most coveted global award for industry analysts in technology and services.

2 responses to ““Honestly, history tells us the act of outsourcing doesn’t save money…” Gartner Group”

  1. Ajeva

    I may have to agree that sustaining operations and producing quality work at low cost is the real nemesis of outsourcing projects offshore. When you are facing the reality that your current and loyal customers are completely dissatisfied with the products or services produced by your offshore team, you know that your business is heading down the drain. It’s a lot easier keeping old clients than getting new ones. Then, here comes cloud computing and crowdsourcing challenging those who are in the outsourcing business, especially those in tech or IT. We’ll see just how businesses can come up with some solid way of addressing the issue and not just a band-aid solution to fix what was broken.

  2. Vaughan Merlyn

    From my experience, outsourcing CAN save money, but sometimes does not, and often, where it does save money, the savings are not sustainable.

    But in many respects, the whole tack of “outsourcing saves money” is misguided and leads to bad outsourcing decisions being made and deals being struck. The most successful outsourcing arrangements I see are associated with companies that had higher order aspirations – for example, creating management bandwidth, energy and focus to do things such as “align innovative IT with the business to drive productivity and revenue, to explore Cloud Computing and smarter governance / multi-sourcing models” as you mention above.

    Having such higher order aspirations creates a much more productive and conducive climate in which to explore and structure alternate sourcing arrangements. If they yield cost savings, that is a welcome bonus!