Outsourcing: You Get What You Ask For

It doesn't take much outsourcing experience to learn you can't take vendor promises on faith, but many companies do just that. When management is under the gun to slash service delivery costs, or under siege from dissatisfied internal customers who can't get what they need when they need it, they'll want to make a quick decision. The vendor will often help speed the decision by cutting prices. In a competitive bidding war for a prized client, the vendor may even price services below cost to win the account. Management breathes a sigh of relief—it has killed not two but three birds with one stone: It has achieved the desired cost savings (thanks to tough bargaining); internal customers will have their needs met; and management has disposed of a lingering service delivery problem. Looks like a win‐win for everybody.