Archive for the ‘Outsourcing’ Category

Outsourcing: Good Business Sense or Lazy Management?

Thursday, May 8th, 2008

Outsourcing has become synonymous for downsizing in many organization. However, organizations need to identify key reasons for outsourcing other than increasing the bottom line. In my opinion, outsourcing just to increase the bottom line should be a signal that the organization is ineffective in terms of its product line, marketing, and management.  Outsourcing does make sense when the organization requires skill sets that are not available within the organization.

Organizations should be providing training for the existing personnel within the organization. When the “.com” boom took hold during the 1990’s and there was a shortage of information technology professionals, organizations found the resources to cross-train existing personnel to fill the vacancies. The strategy was/is very effective and the organization received in return more motivated employees and lower turnover.

Filling staffing requirements from within the organization also provides for greater flexibility with strategic planning. Emerging markets require quick, decisive initiatives or the opportunity will be lost to competition. Getting a vendor to react to emerging markets will take time, so the organizations needs to consider response time to strategic initiatives when considering outsourcing.

There are circumstances that warrant outsourcing. An example would be Customer Support; if your product is easy to support. Customer Service will also experience less of an impact when addressing emerging markets, because while the volume of calls will increase the basic technical questions will remain consistent. The organization also has the luxury to outsource lower levels of support while maintaining higher technical levels in-house.

PS: The people let-go from an organization are also the organization’s customers.