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The Forgotten Stakeholders -
Forming Teams in an Outsourced Environment

Ginsberg's Law. You can't win. You can't break even. You can't even quit!

Keywords: Outsourcing, Human Resource Management, Stakeholder Management, Team Formation, Leadership, Alienation.

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The Forgotten Stakeholders -
Forming Teams in an Outsourced Environment

Organisations have outsourced their IT functions primarily to reduce costs or to become more competitive. These outsourcing agreements are typically subject to intensive negotiation between the potential supplier group and the organisation’s Finance Group. Rarely is the wider community of organisation stakeholders consulted, either before or during the negotiation and selection phase. This community of ‘forgotten stakeholders’ is often the group most affected by the outsourcing arrangements. They are the employees who will be transferred to the supplier, offered redundancies or become the ‘survivors’ – the ones left behind. This period of uncertainty leaves the forgotten stakeholders feeling anxious or guilty, often severely affecting their productivity and attitudes to work as the individual experiences alienation resulting from inadequate consultation and change management practices.

The paper outlines some of the reasons for outsourcing IT, and describes the risks to the organisation of inadequate preparation and negotiation of contracts. It also outlines ways to ensure a more successful outsourcing relationship between client and supplier. In addressing alternatives to outsourcing, the paper identifies the importance of trust and commitment in relationships between organisations, between organisations and their employees, and between employees – particularly those in teams. Without the establishment of trust and commitment between the individual team members, they will never grow into high-performing teams.

Two models of team formation are investigated, the first being the 35 year-old Tuckman Model describing a gradual progression through ‘forming’, ‘storming’, ‘norming’ and ‘performing’. (Tuckman 1975) At the other end of the spectrum is the ‘punctuated equilibrium’ model of Gersick, which proposes that, as in nature, teams forge stronger relationships only after a cataclysmic event such as severe interpersonal conflict, major schedule slips or any other major event of project life. Under this model, the leadership requirements will be different. (Gersick 1988) If the Gersick model best reflects projects in today’s environment, there will need to be a major paradigm shift in how Project Managers form multi-vendor, multi-skill teams and lead them to successfully deliver the IT solution. The Research Proposal identifies research that can be conducted to try to better understand how teams form in the outsourced IT environment.

Author: Dr. Lynda Bourne

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