Companies would love to see more competition drive down prices, but that alone won't make the decision to outsource all that much simpler. Often the more important starting point is to think carefully about what is being outsourced, and how. "We have seen cases with finance and accounting outsourcing of companies that moved too many processes at once over to a third party, and those processes had to be pulled back because they just went out too soon," says David Upton, professor of operations management at Oxford University's Saïd Business School. Two common errors: failing to take the time up front to do a detailed analysis of a process being outsourced, and not preparing staff for what needs to change internally to help the outsourcing agreement run smoothly.
Even before addressing those kinds of execution challenges, companies need to think about whether a given process should be outsourced at all. Often that hinges on determining whether or not it is "core," an issue far more difficult than it may appear.
