"The supplier is trying to maintain a reasonable profit margin, and so prefers to deal with the outsourced activity in the most cost-effective manner possible," he explained. "However, the company's goals will change over time along with its business model, and those changes may no longer be met by the approach provided by the supplier."

 

To remedy this common problem, Bragg suggested several solutions. First, obtain a somewhat shorter contract term, so the company can shift suppliers as its needs change. Second, make sure that a senior-level manager is assigned to be the coordinator of all activities with the supplier, thereby ensuring that a sufficient level of management "muscle" can be brought to bear on the supplier. Finally, keep a strong communications channel running with the supplier, so that both parties are aware of necessary changes as soon as they arise.

 

Bragg said the second edition of Outsourcing: A Guide to ... Selecting the Correct Business Unit ... Negotiating the Contract ... Maintaining Control of the Process examines "key problems related to contracts, management, employee transition, and controls" and "how to measure the performance of each supplier."

 

If there is just one thing he wants readers to take away from the book, it's to "never outsource a core competency. Always conduct a cost-benefit analysis before outsourcing, because oftentimes it still makes sense to keep a function in-house."

 

The target audience of the book includes corporate managers and managers of each functional area, said Bragg.