More and more companies are focusing on their core activities and outsourcing the rest. The explosive growth in the B2B market has resulted in running contracts that are signed by companies at every level, from the top to the bottom. The result is that very often, these companies do not have the oversight that their owners expect. A typical situation is the automatic renewal of contracts that have run for many years, and were signed by employees who have now left the company. No one knew about the contracts, because they weren’t relevant to anyone.
The other side of the outsourcing coin
Over the last 20 years, companies have been focusing more and more on their core competence. Each company does what it does best, and buys everything else from subcontractors. Now everyone leases computer and production equipment, hardly anyone owns the buildings they use, and companies even rent office plants (including aftercare and watering services). The other side of the coin is an explosive growth in contracts between companies. Added to that is the fact that there are no longer only a few people in a company who are allowed to sign contracts on behalf of the company. The result is unnecessary and expensive chaos. It’s a real shame that the benefits of outsourcing are outweighed by a lack of control over contracts.
“I must emphasise that in no way are we opposed to subcontractors. But we are big fans of control. Our clients don’t just notice big savings, but also find that they make better use of the many excellent contracts and assets that they have. It’s rather like being the commander of a warship: For maximum striking power, you need to know what weapons you have on your ship”.
Lasse Sten, founder and CEO of House of Control