Managing the outsourcing relationship : does management really know what they are getting into?
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Outsourcing is the contracting out of some task to a vendor outside of the actual firm itself. It is now considered to be a world wide management tool for revitalizing and reestablishing a corporation. Outsourcing challenges the way top management thinks in terms of the traditional organization versus the more flexible organization consisting of exterior relationships focused on the long-term and an interior relationship which is focused around core competencies. The research for this paper used a case study approach along with personal interviews of top level information technology executives that had recently completed an outsourcing contract. The primary goal of the research was to find what kinds of challenges today's management faces when they first attempt to outsource a portion of work. A secondary point of interest was how the expectations of the contract met up with the outcome of the project. Other concerns were the advice the respondents would give to other companies, the criteria utilized to evaluate the vendor, and the factors that prompted the organizations to outsource in the first place. Findings suggest that several problems do exist within the outsourcing relationship. The relationship should focus on long-term goals and not short-term cost savings. The decisions that are made must not be dominated by the vendor. The relationship must remain a partnership at all times.