Home
>
Strategic Planning
>
Making a Decision to Outsource: Strategic Constraints

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.

same day cleaning service Des Plaines ..

In The News:

New Android banking trojan Sturnus steals credentials, reads encrypted messages and controls devices.

Denmark's 3D-printed student village proves automation builds 36 apartments faster than traditional methods. Skovsporet project shows housing future.

Discover Android's new Sound Notifications feature that alerts you to smoke alarms, doorbells, and baby cries even when wearing headphones.

New SantaStealer malware reportedly threatens holiday shoppers with password theft. This Christmas-themed info-stealer targets browsers and crypto wallets.

The Christmas season brings a surge in Netflix phishing scams targeting shoppers with fake emails. Stacey P received convincing scam but verified account first.

San Francisco Giants invite Jamie Grohsong to throw ceremonial first pitch at Oracle Park after he learned to play baseball with a bionic hand following an injury.

FBI warns cybercriminals are stealing family photos from social media to create fake proof of life images in virtual kidnapping scams targeting victims.

Instagram's new 'Your Algorithm' tool lets you control your Reels feed in real time. The app now gives you power to customize what videos you see.

Major Marquis fintech breach exposes 400,000-plus Americans' data through unpatched SonicWall vulnerability, with Texas hardest hit at 354,000 affected.

Free up iPhone storage fast by clearing large photos and videos from Messages app. Simple steps for iOS users to delete attachments without losing chats.

Scammers are flooding inboxes with fake tracking alerts that mimic real carriers, exploiting the holiday rush to steal logins and personal data.

The Fox News AI Newsletter brings you the latest news on AI technology advancements and the challenges and opportunities AI presents now and for the future.

Texas family reunites with missing 11-year-old cat Grayson after 103 days using Petco Love Lost's AI photo matching technology and community help.

Tired of AI customer service loops? These insider tricks help you escape "frustration AI" and get real human help when you need it most for urgent issues.

Unlock richer audio from your streaming apps with simple tweaks to volume normalization, equalizer settings, and quality preferences for cleaner sound.

Scammers are sending fake Facebook settlement payout emails that mimic legitimate notices from the privacy settlement administrator to deceive users.

Holiday shopping scams surge as fake refund emails target distracted consumers during Black Friday and holiday seasons, costing Americans billions annually.

The AI-powered IRMO M1 exoskeleton features four modes, including turbo, eco, training and rest for hiking, running, cycling and sports with eight-hour battery life.

OpenAI announced upgrades for its ChatGPT Images platform on Tuesday, saying the program can now make more precise edits and produce images more quickly.

Chrome for Android now turns web articles into AI-powered podcast conversations. Get hands-free browsing with Google Gemini's natural audio summaries.

LastPass faces $1.6 million fine from U.K. regulators after 2022 data breach exposed 1.6 million users. Password manager failed proper security controls.

Petco disclosed a data breach exposing customer Social Security numbers, financial account details, and driver's license information due to a software error.

Baseball teams can now analyze complete swing mechanics in normal training environments using Theia's markerless AI system that processes standard high-speed footage.

Smart home hacking fears overblown? Expert reveals real cybersecurity risks and simple protection tips to keep your connected devices safe from hackers.

MIT develops needle-free glucose monitor using light technology. Revolutionary device could replace painful finger pricks for diabetes management.

Making a Decision to Outsource: Strategic Constraints

Strategic Planning