Spend Matters would like to welcome a guest post from Vantage Partners.

In Part I of this five-part series, we will share an overview of some of the top reasons a buyer decides to outsource. Additionally, we will explore how you, as the buyer, can enable the outsourcing service provider to effectively deliver on the arrangement, thereby helping you reach your own objectives.

Despite the continuing growth and maturity of the out¬sourcing industry over the last twenty years, too many relationships are still failing to deliver the value they are expected to generate [1]. While it is tempting to point to providers' shortcomings in service delivery or "oversell¬ing" in the sales process as the source of most outsourc¬ing failures, experience tells us that success or failure in outsourcing is rarely one-sided. Many buyers have gotten so good at delineating contractual responsibilities (using RACI or other models that detail a separation of roles between buyer and provider), that they forget that there are things they can do to make it easier (or, as is often the case) harder for their provider to deliver the results they want.

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Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom, transportation and energy.

IT outsourcing is a fickle thing. A decade ago, enterprises couldn't outsource and offshore their IT operations fast enough. Then, due to myriad of factors including the economy and support concerns, growth in IT outsourcing slowed and some enterprises brought IT functions back in-house. A study conducted in 2010 by Computer Economics showed that the number of companies outsourcing application development (the single largest category in IT outsourcing) declined 20 percent from 2007 to 2009.

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Earlier in October, BCG penned a column examining which US industries would likely benefit most from a US Manufacturing resurgence. In the article, BCG suggests there are "seven 'tipping point' sectors [that] are poised to return to the U.S. for manufacturing: transportation goods, computers and electronics, fabricated metal products, machinery, plastics and rubber, appliances and electrical equipment, and furniture." Click through to the article to examine the actual jobs, trade and economic output impact if these industries do, in fact, cross the tipping point in bringing production and spend back onshore. In reading the piece, what I found most insightful in this discussion was not "who" but "why"?

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Spend Matters would like to welcome a guest post from Danny Ertel, Partner at Vantage Partners.

Recently, there has been much debate as to whether legal process outsourcing (LPO) is a good or bad thing. But much of the debate neglects to consider that LPO is not just "one thing." To be carried out successfully, LPO programs have to be "fit for purpose," and as the objectives to be met are quite different, LPO programs (including thoughts on what to outsource, to whom, under what terms, and subject to what governance) must also be different. Law firms, for example, might think about different kinds of outsourcing to meet very different objectives: from back office outsourcing aimed at reducing overhead costs (e.g., IT or Finance activities), or middle office outsourcing aimed at improving performance or competitiveness (e.g., knowledge management or business research), to front office outsourcing aimed at improving the cost effectiveness of delivery models (e.g., document review or due diligence). For additional thoughts on outsourcing for law firms, check out this post.

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Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom, supply chain transportation and energy.

Outsourcing has evolved tremendously over the last 15 years, from the breadth of functions to the maturity of SLAs. So, what do today's risks look like? According to the 2011 IDG Enterprise Outsourcing and Service Providers Survey, the biggest risk is quality of service. CIO.com recently reported on the findings of this survey:

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One of my favorite new responsibilities (sarcasm intended) of my new role running Azul Partners, the parent company of this site as well as MetalMiner and Spend Matters UK involves streamlining the proverbial back office -- making sure the company has the appropriate policies and procedures in place to create efficiencies, visibility (into our books and business), and last, scalability. And though Jason has done a tremendous job growing our little rag-tag business (and team) as he likes to call it, he probably had good reason to shift some of these operational tasks to me (I can't operate as effectively, shall we say, as Jason does in a fire-hose type environment). As our team has grown we've obviously needed to add folks to payroll, supply health care, a 401k etc.

In addressing the tasks at hand, my experience with Compupay has been...well...I'll let you read below.

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Without question, the past twelve months has seen a material shift in the world economic order. Aside from debt bailouts and economic concerns in the West, global markets and global market practices continue to dominate many conversations. From rising debates ranging from global labor practices to the impact of free trade versus Chinese mercantilism, among other discussions, it seems the global sourcing equation is getting more and more complicated. In the context of global services markets, a recent AT Kearney study that I came across raises a number of findings and observations that will help contribute to continued discussions in these areas. Perhaps its most insightful high-level takeaway is how the recent recession has in fact "accelerated the shift of global economic production and consumption from developed to developing worlds" despite local protectionist policy and rhetoric in certain markets.

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We're excited to announce the availability of our most fun -- and we believe most insightful -- research analysis of procurement BPO to date: Tips for Making the Promised BPO Benefits Real -- Alignment, Focus and Integration. The paper, co-authored by HfS' Phil Fersht and Spend Matters' Jason Busch, personalizes what it takes to get the most from procurement BPO relationships. The secondary title just about says it all: "Jason Busch and Phil Fersht Apply Lessons From Dating and Marriage to Procurement BPO." Despite the whimsical lead-in, this Compass research brief is not all fun and games (though we hope the more informal tone will leave you amused). In fact, the analysis offers some highly prescriptive areas for company introspection before heading down the BPO path (e.g., process maturity examinations, dangers of "lift and shift" thinking and skills, and knowledge awareness) as well specific advice on what potential partners should bring to the table.

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Note: This article was reposted due to a formatting error.

For all Spend Matters readers, this YouTube video (click "more" below to see it), showing a Chinese J-20 maiden test flight from earlier today, should be a wake-up call that China has graduated from achieving its Bachelor of Cheating degree to a PhD in Advanced Kleptomania. For any company sourcing from China, it's imperative to safeguard your intellectual property, as the J-20 clearly represents a convenient repurposing of US technology (some I've spoken with also suggest some Russian influence). Military technology escalation and rivalry aside, I cannot think of a better poster child than the J-20 prototype stealth fighter to highlight how China is building its manufacturing economy and global might on the backs of an organized effort to steal and reverse engineer Western technology.

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