Outsourcing 'must be managed properly'

27/02/2008

Firms should ensure that they are managing so-called 'next generation' outsourcing effectively or risk losing money and harming their reputations, two law firms have claimed.

Marsh and Hunton & Williams have suggested that some of the changes involved in this type of outsourcing may involve legal complexities that organisations should make sure they understand from the outset.

"Multi-sourcing strategies, for example, are becoming increasingly common but also face significant challenges including greater vendor management time, increased contractual complexity and difficulties on termination," the report stated.

However, Marsh's Matthew Elkington said that despite the risks involved, "outsourcing offers considerable value under new model arrangements".

Some of the factors firms should consider, according to the report, include assessing and benchmarking vendors against risk management standards and imagining interruption scenarios.

The chief executive of Quickstart Global, Neal Gandhi, recently told eGov Monitor that offshoring can open up the prospect of more "higher value" British positions.

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