When Outsourcing Becomes Necessary

We’ve all heard the evils of outsourcing when it comes to cutting jobs for local employees. But if you’re on the other side of the desk, outsourcing certain functions is often a necessity. Check more from this article on Beyond.com.

Most companies try to hire local talent. The problem arises when the specific skill sets needed simply can’t be found locally. And in these tough times, you don’t want to spend money training recent college grads or interns—even if they’re unpaid. You need a certain level of talent that can “hit the ground running.”

It’s no wonder that many admin managers have considered outsourcing certain administrative tasks. Admin departments are being pressured by upper management to reduce operational costs, increase productivity and enhance performance while keeping a lid on on-site staff. The constant changes in business processes and compliance mandates can severely tax existing staff.

The goal of outsourcing is to realize a higher return from your existing infrastructure and resources, and to allow you to develop new capabilities to enhance your infrastructure. Outsourcing administrative services can lower overall operating costs, boost productivity, free up working capital, and maximize shareholder value.

Outsourcing also lets you focus on your core business, allocating increasingly scarce resources to key functions. Organizations often outsource their IT support to niche IT services companies. When you outsource, you move from fixed to variable costs and make variable costs more predictable. Unlike internal services, those outsourced are governed by legally binding contracts with financial penalties and legal redress.

You also benefit from access to operational best practices that would be time consuming to develop in-house. Then there’s the advantage of having instant access to a larger talent pool with uniquely applicable skill sets—as in accounting, creative or IT. According to the Higher Ed CIO, some notable outsourcing trends for 2012 include:

Rise in Cloud Services. These will increasingly deliver IT outsourcing by vendors to cut costs and improve service.
More Offshoring. Domestic IT outsourcing vendors will turn to offshore resources for better margins from labor arbitrage.
Business Unit IT Outsourcing. Shadow IT organizations will start using IT outsourcing providers to meet their needs.
Convenience Sourcing. Customers will pay a premium for convenience IT outsourcing services.

Other benefits of outsourcing include “breathing room to innovate.” External knowledge service providers often supplement a company’s limited in-house capacity for product innovation. Finally, there’s the advantage of reduced time to market by allowing you to shift into high gear in either development or production.

The handwriting’s on the wall: In this economy and for the foreseeable future, outsourcing specific skill sets and IT talent will become a business necessity for many admin managers.

by: Alex Kecskes

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