It is hard to know where to start on this story, as there are multiple angles to come at it from.
1. For anyone looking to say that the LPO industry is in rewind, has had its day, has failed, etc. they were always going to be waiting for a story like this. But they need to read beyond the headlines to see exactly what is happening.
2. For anyone in the LPO space it is a clear reminder that the value of outsourcing is in specialisation. By definition, that means selecting a handful of areas that you want to be world class in, and sticking to them. When I saw the list of activities that Integreon was trying to do at CMS and Osborne Clarke, I really questioned who on earth advised those firms that one organisation could be so good at so many things. LPOs need to know their core zone and stick to it, plane and simple.
3. Multi year strategic outsourcing deals are complicated. What you think will work sometimes doesn’t work, but typically 80-90% goes exactly as planned. The remainder causes pain and sometimes it is right to get another supplier or to bring work back in house. This is actually very common and pretty healthy. Anyone with these kind of deals should always be thinking about where to draw and redraw the line. It happens in other sectors so it will happen in LPO.
4. Did anyone notice that the law firms are NOT bringing the work back in house? They are fully supportive of the model of outsourcing and specialisation, just that maybe Integreon wasn’t the right pick for a few services. Someone else will be, and it won’t be the law firm.
by Ed Brooks