Inside Outsourcing: An Insider's Guide to Managing Strategic Sourcing. - Review - book review

HR Magazine, August, 2000

By Charles L. Gay and James Essinger

Nicholas Brealey Publishing, 2000, 245 pages, ISBN: 1857882049.

More than 90 percent of U.S. companies outsource one or more activities, spending more than $51 billion, according to international business research group IDC. Viewed by many as the cure-all to business problems, outsourcing is often mismanaged.

Written by Charles L. Gay, managing director of Shreeveport Management Consultancy, and James Essinger, a business writer, the book shows how to turn outsourcing from a tactical solution into a strategic business tool. "Outsourcing was initially regarded as a tactical solution to a particular problem, often driven by cost dynamics and not really part of a corporate strategy that could be regarded as strategic," the authors write.

Strategic sourcing, on the other hand, is when an organization works with one or more suppliers to effect a significant improvement in business performance. The growth in strategic sourcing stems from the fact that organizations that do this appear to do well, according to the authors.

Part I consists of three chapters that answer the question, What is outsourcing? In these chapters, readers learn the market value of outsourcing, different types of outsourcing, the benefits and downsides of outsourcing and the concept of strategic sourcing. The first part also introduces new approaches to successful outsourcing relationships including co-sourcing, partnering and in-house management.

The first two chapters of Part II define each approach to outsourcing to help readers determine which one is right for them and explains how to use internal analysis and research to establish the context of outsourcing. The remaining five chapters discuss each stage of the outsourcing process, respectively: planning, selecting the service provider, legal aspects, human resources, and implementation and monitoring. The authors cite real-world examples from Rolls Royce, British Aerospace, Gillette, DuPont and others.

The appendix includes surveys on outsourcing conducted by Shreeveport and the Outsourcing Institute.