Outsourcing Strategies – Not One-Way Business Solution

May 21, 2010

It might be a foregone conclusion is that outsourcing is in vogue for businesses wanting to move up in a complicated corporate world. But there are many proponents of outsourcing who say that it does not mean there’s one site fits all kind of a policy when it comes to spinning off projects to faraway destinations.

Outsourcing to India, IT outsourcing in Philippines and outsourcing to China have been popular strategies for companies looking for skilled labor and cheaper costs. But these are not the only options available. Many new strategies and options have emerged in the outsourcing industry amid the economic turmoil that rocked the financial markets in 2008. And one of these is the concept of having your projects outsourced closer to home. This is exemplified by nearshoring and onshoring, where companies can actually travel to their partner firms and observe performance and make changes to strategies.

One of most common problems among first-time outsourcers is that they outsource a major project to big name firms offshore and wait for fantastic results. However, this may not be the case without strong input and resources from the host company itself. There needs to be strong point of contacts at the base for outsourcing firms to take advantage in terms of resource persons facilitating details and figures that go into the success of the project.

Yet another problem in outsourcing work abroad is that often firms do not follow up with an analysis of how much was gained via an outsourcing deal. This translates into cost savings and advantages gained.

According to Ann Lull, editor of ATMmarketplace.com, alignment, culture, and staffing are critical aspects of outsourcing, not just the software and the applications that make up the project. So you can see that retaining sufficient staff as relationship coordinators available for outsourcing is a significant part of the outsourcing process, reports itbusinessedge.com


3 Responses to “Outsourcing Strategies – Not One-Way Business Solution”

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  2. Brian Tedesco on May 24th, 2010 2:13 pm

    Great article! After reading Ann Lull’s comment that “alignment, culture, and staffing are critical aspects of outsourcing, not just the software and the applications,” I had to chime in. In our experience at Castelmec, these factors are absolutely critical lynchpins in the success of any outsourcing venture – especially when the outsourced processes come in direct contact with customers!

    Outsourcing sales in Latin America has long been a coveted – and challenging – idea for many foreign manufacturers. Because the Latin market is actually 18 distinct markets, each with its own political climate, cultural nuances, currency fluctuations, and other influential factors, it has been prohibitively expensive and complex for many manufacturers to penetrate the Lain markets. Even Wal-Mart struggled: http://castelmec.com/blog/?p=18

    For a detailed discussion of the inherent challenges of outsourcing, including ways to maximize transparency and market intelligence, follow this link to the CAGE Factors white paper: http://castelmec.com/white-paper.html

  3. Steve on November 10th, 2010 12:38 pm

    Outsourcing isn’t something new, but what seems to be the case now is that things are going at a frenzied pace — and maybe, just maybe, businesses forget there are critical factors that need to be examined first, before plunging into it.

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