Strategic Outsourcing: Risks, Rewards and Relationships

Bharat Vagadia ()

Chapter 6 in Strategic Outsourcing, 2012, pp 81-91 from Springer

Abstract: Abstract Outsourcing can deliver significant rewards to organisations, beyond the common cost reduction benefits that are most obvious. These cost benefits are derived from labour arbitrage, process optimisation, IT enablement and scale. Other benefits include: focus, access to expertise, flexibility and faster time to market. However, there are a number of risks in outsourcing that need to be recognised and managed, from loss of core competence, cost escalation, supply market risks and change management costs. Managing these risks needs a combination of a strong legal contract and a good relationship, one that is built on mutual trust. This chapter explores outsourcing risks, rewards and relationships.

Keywords: Cost Management Change; Labor Arbitrage; Cost Escalation; Outsourcing Relationship; Business Process Outsourcing Success (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/978-3-642-22209-2_6

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