Attendees get down to business at Outsourcing Summit

Gartner says outsourcing has hit the mainstream for companies of all sizes, but evidently the controversial aspects are still alive and well. Some companies are eager to learn more but aren't all that enthused about discussing their plans.

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LAS VEGAS -- What happens in Vegas may stay in Vegas, but many attendees at the Gartner Outsourcing Summit 2004 this week plan to go home and tell their bosses everything they see and hear in Sin City about outsourcing.

More than 1,000 C-level executives, IT managers and business managers are cramming into the three days' worth of keynote presentations and track sessions that cover topics ranging from steps to mastering outsourcing to what's new in outsourcing contracts and the challenges of outsourcing over the next five years.

Tina Braxton's boss wanted her to jot down some ideas from the "Ten Steps to Mastering Outsourcing" presentation. Braxton, a senior supply chain specialist for Memphis, Tenn.-based FedEx Corp., was especially interested in pointers on making a business case for outsourcing.

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"We're looking at ways to optimize our current supplier base, but before we can do that we have to have the justification to provide upper management with to approve the strategy," she said. "[Gartner] brought up a lot of good points."

At last year's Outsourcing Summit, many attendees showed up to see what this outsourcing trend was all about and how they could get in on the action. Now, one year later, the trend is maturing, and the sometimes prickly realities have come to the surface. People are past the "let's save money fast" stage and want to know how to deal with problems.

Chris Campbell, president of Atlanta-based telecom service provider FCAPS, said that many attendees have come this year to learn more about managing complex multi-vendor environments. "I don't think there's anybody who has really mastered that yet," he said. "People typically do not invest in that aspect of the deal; they just want to cut the lowest price and get the business case approved."

Braxton and Campbell are rarities; they actually agreed to openly discuss their outsourcing plans. Given the sensitive nature of outsourcing -- offshore outsourcing in particular -- many people don't feel comfortable talking publicly about it. Others have to have their bosses or legal departments, or both, sign off on any outsourcing talk.

One attendee who works for a large public utility was sent by his CIO to learn as much about outsourcing as possible. Mixing outsourcing, especially the offshore variety, with a public entity is a recipe for backlash. That's why he didn't want his name or the name of his company revealed. He said that hardly anyone within his own company even knows that outsourcing is being considered as a strategy.

"Not a lot of utilities are doing it, but a lot of other companies are doing it so we decided we should take a look and see if it's something we should pursue," he said. The CIO isn't ruling out offshore possibilities, nor is he ruling out onshore ideas. "Everything is in unless there's a compelling business reason to rule it out," the attendee said.

Another attendee who didn't want her name or company identified came to learn how to use outsourcing to enhance its well-known desktop services. "We want to be making the best decisions for our customers and thinking [about their best interests] three to five years ahead," she said. "We don't want to be in a position of making knee-jerk decisions.

One of the reasons many people are so reticent when it comes to outsourcing could be because, all too often, "outsourcing" is considered synonymous with the more controversial "offshore outsourcing." Analysts with the Stamford, Conn.-based Gartner Inc. said that the two terms are often interchanged but are not the same.

"Offshore outsourcing is a delivery mechanism; outsourcing is a management strategy," said Cassio Dreyfuss, a managing vice president in Gartner Research. The firm has decided to stop using the term "offshore outsourcing" and instead is calling the practice "global sourcing." Gartner feels the term better describes the broad mix of on-site, onshore, offshore and nearshore strategies.

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