More than Cost-saving in Outsourcing
As mentioned, one of the main reasons why there are many companies are considering outsourcing is to save on expenses. This should not be the ONLY reason why companies outsource and as a category in looking for the best outsourcing vendor.
Professor Leslie Willcocks from the information systems and innovation department at the LSE gave a sound advice when choosing the best outsourcing provider for your company. The Professor said that "three-quarters of winner's curse outsourcing deals – where the provider makes no profit – also result in a bad experience for the customer."
I totally agree with the professor's advice, after all what is the point of a business when it is not earning? Beware of outsourcing vendors who have very low prices because their delivery might be really low so as to coincide with the price that they are offering.
Companies who really wants to benefit from their outsourcing deals should look beyond the cost-saving strategy. This includes picking out an outsourcing vendor which would deliver quality results for quality prices.
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Nice blog.
It’s all to easy to be attracted by monetary savings, more so when you feel you need to chase money or perhaps your competitor has just outsourced and so you must.
The value to seek is finding and utilising skills that would otherwise be unavailable to due lack of geographic diversity. Commonly, at the moment anyway, you can get this and save money. However as outsourcing becomes known simply as sourcing (just globally) the cost savings are likely to reduce.
Comment by Stuart Oliver on September 18, 2006 6:17 am
Cost saving is not the only factor because of which companies outsource. Outsourcing also enables companies to focus on their core business. It helps businesses to shift their focus from peripheral activities towards the work that serves the customer well.
Comment by TeamGrowth on September 23, 2006 6:16 am