Outsourcing

Outsourcing has become a trend for companies today. Western companies are relocating their back office operations to Asia particularly in India and Philippines. Possible reasons would be to minimize operating costs and so that they can concentrate more on their core business.

However, companies must not just immediately to the outsourcing bandwagon. Careful study must be done in order to know which of the departments or operations can be outsourced to suppliers. This is easier said than done. A lot of outsourced operations or projects have failed since there was no thorough study on its implications.

Granted that outsourcing has many advantages, it can also be a big failure if not done properly. Stakeholders or managers must know what are the “strategic” and “tactical” goals and their differences when it comes to their business.

Strategic means, what are the long term benefits of outsourcing for a particular operation and how it will affect the business in the long term. If it will benefit the company in achieving goals or milestones, then, I say go for outsourcing.

However, there are times that outsourcing can only be beneficial in the short term. This is a tactical response. For example, there is a need for a particular system that is needed to be done quickly but there is not enough manpower. Let us just say that it is an emerging business requirement that must be address now but not necessarily for the long term.

As I see it, outsourcing can either be a big help, or just one big expensive project with no real or tangible output. Before a company decides to jump right in, they must decide what to outsource, how long, and it must go hand in hand with the company’s business goals.