Outsourcing Revisited: Is It A Viable Strategy?

Posted on July 28, 2010


According to recent studies, two-thirds of all outsourcing programs fail to achieve the expected results. In fact some studies even suggest that this estimate is low putting the number as high as 90 percent.

And this is not a new phenomenon.  Industry reports and articles between 1995 and 2007 tend to suggest that little progress has been made with a strategy that appears to be long on promise but short on results.

This leads to a number of questions the most important of which is simply this . . . is outsourcing a viable strategy?  And if it is, why the dismal track record and, how can an organization ultimately make it work?

The above are the opening comments from a show we aired last year with Phil Fersht who at the time according to AMR’s Mickey North Rizza, was the firm’s “Outsourcing Guru.”

Fersht, who has since left AMR – a firm he joined in January 2008 – to pursue his Horses for Sources vision, provided some interesting insights into the reasons behind the above referenced trends.

That said there is still a great deal left unanswered in terms of the practical application and enduring benefits of an outsourcing strategy.

It is this practical, real-world view of outsourcing that makes today’s program most interesting, as I welcome IACCM’s Founder and CEO Tim Cummins and 30 year public sector veteran and author of the seminal “Towards Tesco” paper Colin Cram, to talk about outsourcing from the client perspective.

About Tim:

Tim Cummins, CEO IACCM

Tim Cummins, CEO IACCM

Tim Cummins is CEO of The International Association for Contract & Commercial Management (www.iaccm.com).

Tim spent many years as a commercial manager and executive, working in the banking, automotive, aerospace and technology industries. His work has taken him to more than 40 countries and he has lived inthe UK, France and the United States. Tim’s career included a period on the Chairman’s staff at IBM Corporation, in a group studying the business impacts of globalization and options for corporate restructuring; he then led the reeingineering of IBM’s worldwide contracts and contracting organization. Tim was the founder of IACCM and has led its development since incorporation in 1999. In this role, he acts as an ambassador for change in the way that trading relationships are structured and managed, and provides advice to member companies and public sector agencies on how to improve contract and relationship outcomes.

While Tim has been a guest on shows such as the PI Window on Business on Blog Talk Radio, IACCM has received extensive industry coverage including appearances by Vice-Chair Tim McCarthy as a guest panelist on the two-part segment (Is The Traditional Association Model Dead? Part 1) – Air Date, April 9th, 2009 & (Is The Traditional Association Model Dead? Part 2) – Air Date, May 21st, 2009.

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About Colin:

Colin Cram in Action

Colin Cram has a successful procurement, outsourcing, conference programme and training consultancy business, Marc1 Ltd. An Office of Government Commerce accredited consultant, he is a regular speaker at national and international seminars and training events, lectures on university degree courses, is a regular contributor to professional journals and is an associate of Manchester Business School. He has been a member of EU working groups on Procurement, Innovation and Sustainability. He provides consultancy services to public and private sectors, including how to secure business from the public sector.

Colin Cram, a Fellow of the Chartered Institute of Purchasing and Supply, held senior procurement positions in the public sector for over 30 years, including central government, higher education, scientific research and local government. He was responsible throughout for initiating and implementing innovative strategies for procurement, shared services, outsourcings and organisational re-engineering. He developed and successfully implemented strategies to tackle monopoly supply situations. In creating several leading edge procurement organisations and collaborations, he was responsible for third party spends of up to £7bn a year. Savings from his initiatives exceed £1bn pa.

Colin’s most recent public sector position was as Director and founder of the North West Centre of Excellence. This led the drive for efficiencies through collaboration, joint procurement organisations and better practice across 47 local authorities. Its scope included procurement, construction, shared services, health and social care and the national lead for local passenger transport.

Remember to use the following link to access both the live and on-demand broadcast “Outsourcing Revisited: Is It A Viable Strategy?” which airs at 12:30 PM EST on Monday, August 2nd on the PI Window on Business on the Blog Talk Radio Network.