Managing Outsourcing: Organizational Structure

There are lot of factors affect to handle a successful working relationship in managing outsourcing. These are four popular factors below:

1. Organizational Structure
2. Governance
3. Day-to-day working
4. Supplier development

We will discuss about organizational structure in this journal. The vendor of outsourcing tries to earn more while the client tries to cutting cost. From that difficulty, the vendor and client do not have the same goals when they put efforts to their joint. Therefore, they have to discuss about how they are going to joint manage the contract they sign. In case of Eastman Kodak Company, they has an incremental agreement with IBM in outsource the managing of data centre at U.S. then expand to six international sites.

A typical solution for parties is layered joint teams. A top-level team has final word for conflict resolutions. An operational team monitors everyday functioning. A special-purpose team deal with pressing issues. Come back with Kodak, their management structure has some elements: a management board, an advisory council, a supplier and alliance management group, etc.

Even though, the joining is a common management structure but a single executive still needs in charge at each side of their relationship. At client side, this position is the relationship manager. A relationship manager should good at negotiating, sweet talk, and effective communication between end users and service providers.