Outsourcing is indeed a good option for cost savings and greater efficiency. As the CIO of my company, I believe this article truly clarifies some of the assumptions most companies usually make whenever they form a contract with a vendor. Of outmost importance to my company is the debunking of the myth that an outsourced vendor cannot “have it all,” that there should be a trade-off between being efficient, being effective, and being flexible. Some companies tend to assume—and most vendors as well—that they can provide be these three qualities. The topic would greatly influence the way people in my company think. I believe this article would make my company better in contracting and dealing with vendors. The article further states that the contract does not mean a sealing of a deal: the contract is dynamic and can change over time, thus my company should take that into consideration.
Although outsourcing seems to be something that alleviates a heavy load from the shoulders of those who are higher in the company ladder, as CIO, it does not mean that I should rest easy just because one of our processes or products is outsourced. I need first to understand what the underlying factors are when it comes to contracts with outsourced vendors. I should also think about the bigger picture; if the company would go as directed or not. Large firms often use outsourcing and off-shoring practices, and aligning not only I, but also the company, to such practices would improve cost savings and product quality. Outsourcing is not a “frictionless” market where everything runs smoothly; it is a highly “corrugated” market where clients and vendors must find ways to go through ups and downs, with both still standing by the end of the day. Indeed, Puranam and Srikanth (2007) said it better: “with time, partners learn to communicate better, leading to more efficient coordination and fewer mistakes.”