|To Outsource or not to Outsource?
of Outsourcing has become a very important subject in US business.
A member of our team has in fact has outsourced hundreds of millions of
dollars per year from a Fortune 500 company. Many other companies
have looked into outsourcing or have already done it.
In spite of this high interest, what we find is that many companies
do not evaluate whether or not outsourcing is a good idea for them.
The reason is likely the difficulty of modeling the alternatives.
Is Outsourcing a good idea for everyone? The quick answer to that
is "no". It is a great idea for some, and a bad idea for others.
Much depends on what the main product or service the company has to
offer. A second issue is how much the company has already
capitalized and on what items. For many companies, outsourcing in
fact yields zero improvement on profits. While that statement is
often true, outsourcing can still be an excellent idea for some.
But the facts rely on a complex look on company vision and goals and on
"balance sheet" items such as investment. We can help with this.
And if one does outsource, to whom? And how does one tell if
the company being outsourced to is in fact better at this operation than
we are ourselves? The way to evaluate that is with facts, and math
and metrics. And of course, since it is your company, once the
facts are together, it will still be your decision to go ahead or not.
But, we can help with the facts.
And finally, when one does outsource, how? Many companies
outsource and yet never reap the benefits of it. Much has to do
with the structure of "who does what", and "what support is needed".
Still more yet relies on contracts. Many do not read outsourcing
contracts, until it is too late. We can also help with some of