The Clute Institute for Academic Research

The objective of this article is to study the effectiveness of the company-partner relationship when outsourcing business processes in a large aerospace company. The intent is to supplement existing anecdotal evidence with data collected through a structured methodology in an effort to highlight process inefficiencies that may lead to hidden costs. Recommendations are provided to management as a means of addressing the process gaps to improve productivity. A literature review was conducted and a selection of findings from relevant papers and studies were retained as best practices for a successful outsourcing venture. These findings were then used to generate questions as part of a survey. The latter was distributed to 90 employees and managers from both the company and the vendor with the purpose of identifying gaps with the literature. A mismatch between the survey results and the literature would signal an improvement opportunity requiring management of attention. Although the overall health of the outsourcing process is satisfactory, several aspects of the working relationship were found to be deficient and the cause of inefficiencies (i.e. loss time, frustration, increased cost &). In particular, employees from both sides found a lack in upfront planning, communication of expectations, and information sharing. Furthermore, both employees and managers expressed concern about the need for training to better deal with cultural differences and motivation.