Making a Decision to Outsource: Strategic Constraints

Many companies are reluctant to dive into outsourcing ocean because of various reasons of strategic nature. As far as strategic goals are touched upon, managers are concerned with the following issues:

- Risks and dangers of transferring too much managerial power to one partner. Companies fear to be too dependent on one offshore partner because its failure to meet commitments will definitely result in large losses for outsourcing company. To reduce such risks companies may diversify them, selecting several offshore vendors for partnering, in addition to thorough geopolitical analysis.

- Danger for senior management to become obsolete. When part of functions is transferred to offshore partner, it usually results in lay-offs. This can become a serious obstacle for companies willing to outsource, as they may face strong opposition from its own personnel and labor unions. In both cases indecisiveness and delays in acting may result in low effectiveness or even unprofitableness of outsourcing.

- Danger of becoming dependent from offshore provider. When considering outsourcing possibility, the companies should assess the consequences of vendor failure. The results of such analysis may vary greatly for different companies. To reduce possible risks of failure to carry out delivery schedules, companies shall work out legally binding agreements with tough conditions and heavy penalties.

- Protection and security of confidential information. Most mature offshore vendors enjoy more impressive security practices than internal ones of the outsourcing companies. However, the risk of commercial data theft or security breach significantly increases when working in international business. Although this issue rarely presents a serious obstacle to making a decision to outsource, it should not be underestimated, the requirements must be documented and the methods and integration with vendors defined.

- Outsourcing results in knowledge transfer to outside party and vendors' personnel training. There is an ever-present pressure to retain functions perspective for outsourcing within the company, even if it means increasing staff and training new personnel. The most common argument is that there is always a possibility of returning functions that have been outsourced back into the company. Companies must carefully assess their business knowledge and determine whether its spreading might compromise companies' practices and hinder achieving strategic goals.

Outsourcing is not just making a decision and enjoying the benefits of it. It is an ongoing process of strategic analysis and vendors' relations management. Company must clearly identify its strategic goals, and decide whether outsourcing part of its functions will be beneficial or it may hinder its strategic development. If you are still not sure what option to choose, you may contact us, and our analysts will definitely help you.

Denis Syropushchinsky is a Marketing Manager in qulix systems - offshore outsourcing software development company, located in Minsk, Belarus, Eastern Europe. Our client-oriented approach and effective offshore software development services are the things that will help you to achieve your business goals. If you have further questions about offshore outsourcing, please contact us. Copyright 2005 Denis Syropushchinsky. All rights reserved. This article may be freely reprinted on your websites. We only require that the article and the resource box at the bottom of each article remain unchanged.

tidy up service Glenview ..
In The News:

Criminals test stolen data by applying for deposit accounts in victims' names to prepare bigger attacks. Learn why banks won't share fraud details.
New study of 10,500+ kids reveals early smartphone ownership linked to depression, obesity, and poor sleep by age 12. Earlier phones mean higher risks.
A phone phishing attack compromised Harvard's alumni and donor database, marking the second security incident at the university in recent months.
AutoFlight's zero-carbon floating vertiport uses solar power to charge eVTOL aircraft while supporting emergency response, tourism, and marine energy maintenance.
A new phone return scam targets recent buyers with fake carrier calls. Learn how criminals steal devices and steps to protect yourself from this fraud.
New Anthropic research reveals how AI reward hacking leads to dangerous behaviors, including models giving harmful advice like drinking bleach to users seeking help.
The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.
Holiday email scams, including non-delivery fraud and gift card schemes, spike in November and December, costing victims hundreds of millions, the FBI says.
Holiday visits offer the perfect opportunity to help older parents with technology updates, scam protection and basic troubleshooting skills for safer digital experiences.
Swiss scientists create grain-sized robot that surgeons control with magnets to deliver medicine precisely through blood vessels in medical breakthrough.
Researchers exploited WhatsApp's API vulnerability to scrape 3.5 billion phone numbers. Learn how this massive data breach happened and protect yourself.
Travel companies share passenger data with third parties during holidays, but travelers can protect themselves by removing data from broker sites and using aliases.
Xpeng's humanoid robot moves so realistically that crowds believed it was fake, marking a major advancement in robotics technology ahead of 2026 commercial launch.
Researchers discover phishing scam using invisible characters to evade email security, with protection tips including password managers and two-factor authentication.
iPhone and Android users can reduce battery drain and data usage by restricting Background App Refresh to Wi-Fi connections instead of mobile networks.
Scammers nearly stole an Apple account by exploiting the support system with authentic-looking tickets and phone calls, users can protect themselves with safety steps.
FoloToy restored sales of its AI teddy bear Kumma after a weeklong suspension following safety group findings of risky and inappropriate responses to children.
Threat intelligence firm Synthient uncovers one of the largest password exposures ever, prompting immediate security recommendations.
Viral video shared by Elon Musk shows Tesla's Optimus humanoid robots performing tasks from cooking to construction, garnering over 58.5 million views on social media.
Chinese hackers used Anthropic's Claude AI to launch autonomous cyberattacks on 30 organizations worldwide, marking a major shift in cybersecurity threats.
Apple's new Sleep Score feature gives you a rating for your nightly rest quality. Learn how to set it up on your Apple Watch and iPhone today.
Essential phone settings to enable before losing your device, including Find My network, location services and security features for iPhone and Android.
The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.
Cybersecurity research shows weak passwords remain a major threat, with simple patterns and number sequences putting millions of accounts at risk.
New Android malware BankBot YNRK silences phones, steals banking data and drains crypto wallets automatically. Learn how this advanced threat works.

Fail to plan... or Plan to FAIL??

Running a business, whether it be an offline multi-billion dollar... Read More

8 Ways to Earn More Without Working Harder

Conventional wisdom has it that there are only three ways... Read More

How to Achieve E-commerce Success ?You Gotta Plan!

Before becoming a netpreneaur, I was an entrepreneur. First, I... Read More

The Top Ten Rules of Effective Networking

Many of us are discouraged by the networking events that... Read More

Business Problem Solving

Is there really anything as a problem? Does chaos or... Read More

10 Critical Facts to Put On the Cover of Your Business Plan...

In most business plans, no matter how striking the idea,... Read More

Business Plan Descriptions of Computer System

Entrepreneurs often give little if any consideration to their computer... Read More

Leverage - A Small Step For You /A Big Change For Your Career

Cassy was an employee of a nonprofit who had been... Read More

Buying Used Detailing Equipment and Rainy Day Services

Mobile auto detailing equipment becomes very inexpensive around March each... Read More

Financing Business Expansion for Your Small Company

How you finance the expansion of your business is important.... Read More

Call in the SWOT Team: Produce More Opportunities to Expand Your Business

Have you ever done a SWOT analysis? No, it's not... Read More

The Accountability/Alignment Process: Three Steps to an Accountable Organization

The Accountability/Alignment Process: Three Steps to an Accountable Organization Generating... Read More

More Uses for Your Business Plan

You have invested a lot of time and energy on... Read More

10 Ways To Make Your Business Unique

1. Largest Selection -One way that you can make your... Read More

How Copying the HBO Schedule Can Boost Your Business

I'm not talking about posting the HBO schedule on your... Read More

6 Steps To Laying Out Your Competitive Strategy

Why do so many companies languish and watch as their... Read More

The Tables Have Turned - Its Officially a Sellers Market

Private equity firms have raised so much capital over the... Read More

Don?t Just Talk About the Weather, Use It to Advantage

A well known, national chain of restaurants discovered that certain... Read More

Is Plan B Ready?

Business owners and entrepreneurs are, by nature, risk takers and... Read More

Menu Driven Business Planning

A menu is the foundation of any restaurant; Guests will... Read More

Succession Planning for Business - 10 Key Points You Must Know

By cranking up others development to meet your business needs,... Read More

5 Strategies That Will Boost Your Business Productivity Today! - Part 2

Growing your own small business can be one of the... Read More

Strategic Planning Fundamentals

Strategic planning is vital while starting a new business or... Read More

The Top Five Reasons Strategic Plans Fail

"Most great plans aren't. They are just nice, high-level ideas."That's... Read More

The Importance of Value Mix

( * - the word 'product' can be substituted to... Read More

maid service near Winnetka ..