Exit
Barriers
Outsourcing leads to
limited commitment of internal resources to a process, function, and or
infrastructure. The risk is that the business does not have the capacity to
perform the function, leaving the firm at the mercy of the service provider. If
the outsourcing effort fails, then the company will be forced to find another
service provider, or rebuild the competency internally. Fixing the problem then
requires unraveling the outsourcing relationship. This, in turn, may cause a
disturbance in day-to-day operation of the business. The result will be
increased costs from productivity loss and from transitions to new providers or
internal capability. Going back to our call center example, it is not simple to
turn off the switch on customer service capabilities. Where will the company
find the trained staff to service your customers? How would it acquire
technology to enable the operation? Can it deploy the business processes to
effectively service your customers? What will the impact be to customer
retention and sales?