Is a recession good for outsourcing?


Well according to the research organisations and our own experience the answer is yes! If you were at the Outsourcing Best Practice Awards last week, you would have heard Rachel Stormonth from NelsonHall go through this and say how outsourcing is set to grow in a recession.

Of course a recession can never be seen as a positive experience, as our host Dominic Holland pointed out, people loosing their homes is never a good thing! However, fact is that organisations will turn to us to get processes and services at a cheaper price which may in turn keep them in business and save jobs. Being more efficient and cost effective is the essence of outsourcing.

But we do need to try and take a responsible attitude here. The recession will end and cost loaded projects will run into difficulty, therefore both end users and suppliers need to ensure that they can build up the other two key constituents of a sound outsourcing deal: relationships and success.

No supplier is going to keep on supporting a project if it loses money, they might take it on because business is poor, but when the recession ends what will happen?

Firms will cry out for capacity, skills and volume and cost might no longer be the most important constituent. The “cheap” contracts will suffer, probably from poor service as a result of resources being allocated to more profitable work.

So my point is that even if you are placing, or receiving an outsourcing contract that is actually cost driven, try to build in, maybe through change control, mechanisms that will allow a good relationship to flourish and both sides to see success. One person at the awards mentioned innovation, perhaps that’s the way to go?

Whatever you do, try and look at some of the best practice that the NOA and others circulate. The NOA’s accredited Professional Qualifications Pathway in Outsourcing can make a direct contribution to both suppliers and end users relationships and success!

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