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Many
organizations have tried outsourcing, as a mechanism to increase a
corporation's resource base, and almost all are familiar with the concept. In
some cases experiences with outsourcing have been positive; in others the exact
opposite is true. Those corporations, which have successfully leveraged
outsourcing in their organizations, have often utilized it to fulfill similar
needs. This article explores three areas of need where outsourcing can provide
the most value-add.
1. Leverage an Experience Base: Utilizing resources with a rich
background in the particular area you are focused on can help you beat the
resource barrier. One of the potential benefits of leveraging this experience
base is acceleration in time-to-market. If the outsourcing partner has a deep
understanding of the subject matter in question, they can often hit the ground
running. This enables the partner to provide results much faster than other
resources, which may be available, but require significant ramp-up time. In
addition, an outsourcing resource, with a history of providing services in the
market, may have substantial prior experience enabling them to help you avoid
pitfalls or blind alleys. This can be especially useful when charting unknown
territory or new product offerings. Avoid having outsourced resources develop
innovative concepts; as they may not be around to help you take advantage of
that innovation in the future, or you may want to keep the related intellectual
property and its development process as a corporate asset.
2. Satisfy Needs Outside of Core Competencies: Another way outsourcing
can help beat the resource barrier is by meeting organizational needs in areas
outside the company's core competency. Using outsourced partners to provide
services in non-strategic areas enables your organization to stay nimble and
focused. The specific definition of what is non-strategic will differ from
company to company, but an example might be facilities or grounds management.
Other non-core competencies often outsourced include call centers, business
processes, IT operations, and other largely repetitive and labor intensive
operations. Keeping the focus of outsourcing in areas outside your core
competency will ensure high value add without creating potential future
conflicts for your organization. An additional area to utilize outsourcing is
for one-off projects or activities. These types of activities, while often
necessary, are a resource drain on your organization. Leveraging outsourcing to
cover these areas will conserve corporate resources to focus on areas core to
your success in the marketplace and still accomplish the objective at hand.
3. Realize Cost Efficiencies: Finally outsourcing can help beat the
resource barrier by focusing on areas where the corporation's cost of doing
business can be dramatically reduced. Taking advantage of outsourced partners
to substantially cut costs and improve operations is not only possible, but
also smart business. Not all organizations will be able to cut costs in the
same area, but many are finding areas that require the greatest scaling in
their organizations, like call centers, processing centers and other areas, can
often be good targets for outsourcing. Using a vendor enables you to leverage
that vendor's economies of scale, investment and operational expertise. You can
effectively get a better level of service and provide that higher level of
service to your customers, all for a cost below your current spending level. In
addition, by outsourcing non-core functions you not only save on direct payroll
and investment expense, but you also save on indirect, hidden or additional
over head expenses. These types of indirect cost savings often go directly to
the bottom line as they eat into profits and don't contribute towards driving
revenue.
Outsourcing can
effectively scale your resource base and add value to your organization. If one
of the tips mentioned above enables you to more effectively leverage outsourced
resources, then it may help you complete more items on your endless
"to-do" list.
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