The trend abated briefly when Alfred Sloan developed the famed vertically integrated organisation of General Motors, but by the 1950s, competitive pressures had again driven companies to send work beyond their walls.
Given the relentless demand by customers for getting more for less, it’s certain that work will increasingly be outsourced to partners around the corner and around the world. As various studies and decades of actual experience have shown, the value added through outsourcing not only benefits the outsourcing provider and customer, but the economy as a whole. Global sourcing is not a zero-sum game.
But as smart a business move as outsourcing usually is, effectively managing the workflow is tricky, since a company’s knowledge accompanies its work – often to another shore. Executives need to avoid common pitfalls to ensure that their outsourcing relationships deliver maximum value. I call them the seven deadly sins of outsourcing relationships.
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