Why Outsource ?
survey of senior executives conducted by The Outsourcing Institute,
based in Jericho, New York, reveals that companies look for three
main functions from outsourcing providers - information technology,
operations and logistics. The survey also reveals the 10 reasons
why companies outsource:
to world class capabilities
of internal resources
of internal resources
management of difficult functions
of reengineering benefits
access to and use of capital
has become a much-relied-on strategy in recent years as companies
strive to achieve all or some of these benefits in intensely competitive
Outsourcing grew at double-digit levels in North America during
the late 1990s and continues to grow substantially. According to
The Outsourcing Institute this growth is characterized by
several key patterns:
percent of the outsourcing projects currently in planning is accounted
for by companies who have previously outsourced. (A very strong
endorsement of the benefits outsourcing can provide).
Companies who outsource are more stable financially as a group than
the entire corporate sector combined.
Nine percent of companies considering outsourcing are new to the
process. (Evidence of strong growth in demand).
number of outsourcing projects in the planning stage is double the
number under administration. (Additional evidence of growth).
Successful Outsourcing :
A successful outsourcing relationship boils down to one word - partnership.
The term describes a business relationship that extends beyond the
conventional limits of service contracts to include an alignment
of corporate cultures and values, open communications, trust, shared
goals and objectives, and a true integration of business systems
The Outsourcing Institute survey shows that 10 factors are
key to a successful outsourcing relationship:
company goals and objectives
Ongoing management of the client-supplier relationship
Open communication between all parties involved
Senior executive support and involvement
Selecting the right vendor
A strategic vision and plan
Careful attention to personnel issues
Use of outside expertise
Near-term financial justification
A properly structured contract