Selective Outsourcing
Outsourcing Trends (1)
Outsourcing started with companies outsourcing physical parts
of their businesses. Instead of buying equipment or buildings,
they were leased. Now the big shift has been to outsource intellectually-based
service activities like research, product development, human
relations, accounting, legal work, marketing, logistics, market
research and management functions. If you are not best-in-world
in doing something, and are doing it in-house, you are giving
up competitive edge. By outsourcing to the best you can up the
value and lower the cost.
Top Ten Outsourcing Survey
(2)
Executive Survey: The Outsourcing Institute's Annual Survey of
Outsourcing End Users
Top 10 Reasons Companies Outsource
1. Reduce and control operating costs
2. Improve company focus
3. Gain access to world-class capabilities
4. Free internal resources for other purposes
5. Resources are not available internally
6. Accelerate re-engineering benefits
7. Function difficult to manage or out of control
8. Make capital funds available
9. Share risks
10. Cash infusion
Top 10 Factors for Successful Outsourcing
1. Understanding company goals and objectives
2. Having a strategic vision and plan
3. Selecting the right vendor
4. Ongoing management of the relationships
5. A properly structured contract
6. Open communication with affected individual/groups
7. Senior executive support and involvement
8. Careful attention to personnel issues
9. Near term financial justification
10. Use of outside expertise
Adapted from
(1) The Outsourcing Institute, Jericho,
New York
(2) Survey of Current and Potential Outsourcing End-Users, The
Outsourcing Institute Membership, 1998
