Cost Savings: Expectations Versus Reality

I receive monthly emails from one offshore outsourcing sales executive. Here is one of them:

Dear Nick,

I know your schedule is very tight, but I really hope we have an opportunity to share our ideas on how to help you decrease costs by 300 percent in the next twelve months. I thought since you are in Beijing now, it would be a good opportunity to meet. Looking forward to your early reply.

[Name withheld to protect the guilty]

Wow, 300 percent savings!!! Where do I sign? While the tenacity of the sales exec is commendable, his message is ludicrous. Even if you’re very good at leveraging outsourcing, realizing more than 30 percent in savings is difficult. Why is that? Three reasons: productivity, ...

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