Perpetual Search vs. Status Quo

Any even a semi-decent offshore provider will tell you that they are in it for a long run. That they are not interested in “drive by” project and want to build lasting mutually beneficial relationship. That they know that you have options in the market place and they will do the best never to give you a reason to look for these options… but is it ever a “happy ever after”?

Mr. Buyer, should you ever look back and consider other options in the market place after you found a provider, went through the ordeal of ramping up the engagement and finally started getting the value from the vendor? Chances are you should.

Ms. Provider, be aware – no matter how good your services are there are stronger / better / cheaper vendors out there and their sales force is talking with your customers. Better is the enemy of good. Voltaire. There are plenty of examples when large outsourcing contracts migrate from one provider to another. That’s true for every industry, not only outsourcing.

From the buyer’s perspective there are several main reasons to search for outsourcing options outside of the current provider:

  • If the provider is failing in some major way – one does not need any other reasons. As a matter of fact there are practically no reasons to stay with that provider.
  • If the provider is doing well in all aspects of the engagement and there is absolutely nothing wrong with them… Brush up on Murphy’s laws: the chances are you are missing something. I am being serious, in my 15+ years of experience in offshore I have never seen a situation where there were “absolutely” no problems with my suppliers. And if you know a vendor that can do it please send them my way!
  • If the provider is doing generally well in most aspects of the engagement and just causing you a few minor pains – you still should. However, before I cover some of the reasons I have to mention a few very important caveats:
  • Nobody is perfect. Switching vendors may resolve the issues you are having with your current provider, it will open a whole set of new ones.
  • Search for the suppliers is a cost of its own.
  • Thee cost associated with switching providers is potentially fairly high. It must be considered in what if analysis for the switch.

Now just a few reasons for considering options even though your current situation is almost perfect:

  • Keeping the vendor on their toes. Not just for the shier pleasure of it. It’s all about raising the bar and driving towards higher productivity, stronger value add, better customer service, etc.
  • Planning for the worst case scenario or just being ready for typical issues such as key employee loss.
  • Being aware of market value of the services and thus keeping the price you pay for the service in line with the market.

There is also more to be said about multisourcing (using multiple suppliers), applying “the best tools for the job” model and cross validation techniques, as well as many other related techniques that could help buyers to dramatically increase value they receive from outsourcing partner.

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