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Assessing Offshoring Risks
The Conference Board, Jan 2009, Pages: 82
Only a few years ago, the question at many companies was whether to outsource or offshore portions of IT or human resources business processes. These initial debates are now over, and most companies are wrestling instead with how they should approach sending operations offsite. As the new terms 'multisourcing' and 'rightsourcing' imply, business organizations are now considering all of their options onshore, offshore, nearshore, or even in-house, when looking for the best, most efficient location for a product or service. This report offers an overview of several of the critical issues associated with offshoring, ranging from what to consider during initial planning to oversight of ongoing relationships with vendors, and features case studies from a number of companies that have pursued the offshoring option.
Despite these developments, though, the gaps between perception and reality grow. This is the nature of the topics of outsourcing and offshoring. Everyone craves information, but the only people who willingly give it are service providers. Objective information is difficult to obtain.
Moreover, sensitivities remain, not just from misunderstandings about the practice, but because of the real pain that can stem from sourcing decisions. As with downsizing, sourcing can mean job loss, disruption, and change. These sensitivities have created one of the major challenges in preparing this report: the difficulty in getting corporate practitioners to talk. Even the assurance of anonymity was not sufficient to persuade business executives to share their experiences for case studies or other purposes. People feared that even disguising facts and figures would not be enough to prevent readers from guessing their identity.
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