Reaching Out to Touch

If outsourcing is supposed to capture the benefits of global reach in an increasingly connected world, how come so many companies that are using outsourcing services still insist on micromanaging precisely where their work is being performed?

Set aside for the moment those companies that have legitimate concerns about regulatory requirements preventing them from doing work in certain locales. These clients need to review and approve where the job is getting done.

For the vast majority, however, is it really relevant whether their invoices are scanned in Guatemala or China? Shouldn't the focus be on the quality of the output?

Service providers are becoming more anxious about clients demanding ever more detail on locations used for processing their work. Sure, the Mattel lead-paint ramifications are alarming, but this blog and our discussion is mostly about services, not product manufacturing.

Balancing geopolitical risks is a worthy goal, but it can be achieved by agreeing on a list of processing locations rather than insisting on detailed review and approval of all work flows. In other words: Don't want work done on your company's behalf in Myanmar? Say so in an upfront agreement.

The benefits of outsourcing come through giving the industry's service providers the ability to achieve economies of scale, scope and quality. That means that they must balance supply and demand, flowing work to the most appropriate resource with a fair degree of flexibility.

Focusing obsessively on where the work is getting done is a great example of managing the effort rather than managing the outcome. The benefits of resiliency and cost efficiency come through a truly global delivery model.