Smart Outsourcing Is The Future

Filed in archive Outsourcing News on March 14, 2005

A new outsourcing business model which shifts focus from blind outsourcing to managed outsourcing is emerging in the industry. In the 'Managed Competition' model, instead of enlisting the services of a major service provider, companies outsource to a number of selected vendors that match their specific segments of work. In this way, clients are able to set their own standards of performance for their chosen service providers.

The new model encourages commitment and investment from both client and vendor. The client takes the time to include providers in their strategy, as the providers take risks resulting in innovation and over-all improvements. The model also boasts of better service, pricing and ideas due to the defined playing field set by the provider's standards.

Additionally, client organizations will now develop a strategic framework focused on outsourcing segments of their business to a small set of providers. This creates a competitive environment wherein providers will be compelled to perform at their best everyday.

More importantly, the new model opens up the outsourcing market to smaller players. It is believed that this would break the Big Six monopoly as it allows smaller service providers to compete effectively with bigger players.