I’ve been reading articles about introduction to outsourcing. Here are a few good points that I wanted to share:
Outsourcing has seen a lot of press over the years. Some look to outsourcing as the savior of their company, while others see outsourcing as an evil, job-killing management tactic. Before you start to evaluate if an outsourcing strategy is right for your company, you need to understand what it is and what it is not.
Outsourcing is the contracting out of any task, operation, job or process that was originally performed by employees within your company to a third party for a significant period of time. These outsourced functions can be performed by the third party on-site or off-site. Hiring a temporary employee while your secretary is on maternity leave is not outsourcing.
There are many reasons why a company may choose to outsource a particular function of their business, which may include:
A particularly strong reason to outsource involves a shortage of a critical resource. This can be available employees that possess knowledge in a certain area (e.g., engineers), the availability of raw material (e.g., petroleum or minerals) and an available labor force that possesses a necessary level of expertise at the right price.
Realignment with Core Business
Some peripheral operations are outsourced frequently. It gives the managers the ability to concentrate on the core business issues instead of devoting resources to areas that may be necessary but are not related to the business’ core competencies. A good example is a major hospital that outsources its security operations to an outside company that specializes in security.
The prices of labor and/or materials keep increasing, and competition keeps forcing prices lower. If there is an outsourcing solution that can save your company money and overcome the disadvantages of outsourcing, these areas should be investigated.
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