Breaking up is hard to do

Outsourcing can help the bottom line and get the job done. But outsourcing also can be a big headache if the provider is experiencing high employee turnover, not showing creativity in problem solving, and not making needed adjustments. What's the next option? Well, you can always dump the outsourcer and start over, but CIO Update warns that "breaking up just may bring even more and bigger problems your way."

For one thing, many major outsourcing destinations are showing stress, with India experiencing turnover issues and rising prices, while Chinese and Russian firms are also having issues. Secondly, the transition can raise thorny issues. These include what the contract says about a transition, what access to data is written into the contract, what work product is actually owned, and whether employees whose positions are being eliminated will be cooperative. And most of all, a company must know whether it can get the work done without the outsourcing firm.

"When companies outsource, they often lose the know-how associated with the outsourced work," said Jagdish Dalal, managing director of the International Association of Outsourcing Professionals.

For more on this balancing act:
- check out this CIO Update article