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 ..A piano tuner recently moved to Buffalo, NY, and would... Read More
One of the quintessential parts to any business is your... Read More
Twice a year, Bill Gates goes to a remote island... Read More
In Ohio: besides the 3-Cs you should look at Akron,... Read More
No "meme" isn't a typo and Got Milk, the more... Read More
Microsoft Great Plains fits multiple services market niche and healthcare... Read More
Conventional wisdom has it that there are only three ways... Read More
With a heightened awareness of opportunity, ideas can often be... Read More
Is your business growing as fast and effectively as it... Read More
One Research Scientist at the Hewlett-Packard (HP) Imaging Systems laboratory... Read More
If you own a mobile car wash business or auto... Read More
A strategic alliance is when two or more businesses join... Read More
Imagine an office without a desk, or lights, a computer,... Read More
When developing the competition section of your business plan, companies... Read More
This will make some people angry as hell, but it's... Read More
Remember reading "Alice in Wonderland?"She asks the Cheshire Cat, "which... Read More
The current state of the available technology at the disposal... Read More
In today's rapidly changing and highly competitive markets, many privately... Read More
American Eagle Outfitters and Wet Seal Stores have issued statements... Read More
If you own the mid-size business and actively work in... Read More
Many of Ohio's downtown areas are in need of upgrading... Read More
You know you need a business plan. You probably realize... Read More
So what makes a vision successful? Everyday companies try to... Read More
Succession planning requires the owner of a small or medium-sized... Read More
Strategic alliances are increasing at a rapid rate. It is... Read More
maid service near Winnetka ..Regroup?is this a new management trend? Not a chance! Regroup... Read More
It is always said "If you Fail to Plan, you... Read More
A menu is the foundation of any restaurant; Guests will... Read More
Business owners and entrepreneurs are, by nature, risk takers and... Read More
I love the excitement of starting up a new home... Read More
If you are looking for a partner, funding, angle investor... Read More
To stop a computer virus you must understand how it... Read More
"Most great plans aren't. They are just nice, high-level ideas."That's... Read More
While writing an article recently on effective ways to bridge... Read More
How are you feeling today? Good, not so good, great?... Read More
In this small article we'll concentrate on farmers associations and... Read More
Is there a 'magical' way to exponentially grow your business?It's... Read More
Writing a business plan for a franchised outlet of a... Read More
Business seems to drop, slow or even stop during the... Read More
Remember reading "Alice in Wonderland?"She asks the Cheshire Cat, "which... Read More
Have you ever done a SWOT analysis? No, it's not... Read More
Too much goal setting and strategic planning can leave you... Read More
Running a business, whether it be an offline multi-billion dollar... Read More
( * - the word 'product' can be substituted to... Read More
Cassy was an employee of a nonprofit who had been... Read More
As fast as you can say business disaster, your business... Read More
Does the competition drive you crazy?Are they relentless about taking... Read More
It doesn't take a Terrorist Act, Tsunami or Earthquake to... Read More
Microsoft Great Plains fits horizontal markets clientele and in case... Read More
A strategic alliance is when two or more businesses join... Read More
Strategic Planning |