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Effective Outsourcing
by Nigel Fogden
Published on this site: November 18th, 2006 - See
more articles from this month
As the implications of globalization have sunk into the business world,
the idea of what a company should be has changed. Not long ago they were
institutions-buildings and factories with workers who drove to work in
the morning and punched out at night.
Business models have become much more customer centered since those days.
It's not about your company or your staff, or even your product--your
business is about your customers and what they want. This shift in focus
has led to many companies experimenting with different structures in order
to discover how to meet their customer's needs at the lowest cost and
for the highest profit.
One of the most effective ways of doing this is outsourcing. Companies
define their core competencies and then look to outside contractors to
meet their other needs. Marketing, printing, archiving, human resources-for
every business function, there are other businesses that specialize in
providing it. Microsoft now employs between 4,000 and 5,750 temporary
and contract
workers.
Benefits of Outsourcing
- Outsourcing allows businesses to focus on their distinctive core
competencies, the specialties that the business is based on and that
help it achieve competitive advantage.
- Because they are working within their specialties, companies that
provide outsourced services can often work on a project in a faster,
more efficient and more sustained way than an in house team could.
- Outsourcing allows businesses to better asses future costs because
the company providing the outsourced services must clearly estimate
and propose costs.
Drawbacks of Outsourcing
- Managers have much less control over products and services once they
have been outsourced-you are placing trust in another company to meet
your businesses needs.
- Communication between your company and the contractor can be difficult.
By transferring a function to a contractor you lose the ability to directly
communicate your company's goals and values.
- Outsourcing can result in the loss of in-house and local jobs due
to its ability to lower costs and improve efficiencies. This can, in
turn, make your company dependent on contractors to survive.
How to Outsource Effectively
- Make sure that you have a contact person with your contractor that
you can easily communicate with and who will be accountable to you.
- Have the service or product you want outsourced as clearly defined
as possible before you hand it over to contractors
- Make certain that you can draw from a pool of qualified contractors
so that if you have problems with one you can find others to provide
the services you need.
Nigel Fogden - is an English teacher and writer with 24 by 5
Tech Comm, a technical writing company that specializes in fast, high-quality,
software documentation. For more articles on writing, technology and business,
sign up
for the 24 by 5 Tech Comm Newsletter at http://www.24by5.com
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