We have outsourced a large portion of our information technology environment. As you know, getting internal groups to stick to budgets and forecasts can be a challenge. However, it often seems as though management has more leverage over internal groups than over external service providers. While the management leverage or amount of control may vary between your company s own employees and those of your outsourcer, the forces that cause budget targets to be missed are frequently the same.
Accurate budgets require accurate information.
Budgets must be closely monitored. Management needs to be held accountable for meeting budgets. Anticipating future changes and assessing the impact of these changes is a management responsibility that should not be avoided. In the budget development phase, your company must give the outsourcer as must information as possible about the next fiscal year. This can potentially include sensitive information, such as plans about reorganizations, new products, new services, new markets, a predicted change in the customer base, and perhaps acquisitions or divestitures.