Partner Holding Management - Outsourcing Aims

Aims

We can identify four reasons an organisation may have to use outsourcing:

  • Reduction of costs
  • Freeing in-house resources, which allows their more effective usage
  • Gives access to specialised external resources not available in-house
  • Solves organizational problems

According to research conducted in the US in the 90s by the Outsourcing Institute there are 10 aims companies want to achieve through outsourcing:

  • Control and reduction of operational costs
  • Increase focus on the primary activity
  • Access to first-rate production capabilities
  • Freeing of own resources to perform other functions
  • Access to resources not available in-house
  • Reducing the time lag before seeing the benefits of restructuring
  • Dealing with a difficult or uncontrollable function
  • Hedging risks
  • Increasing capital
  • Cash inflow

Source: Survey of Current Potential Outsourcing End-Users, the Outsourcing Institute Membership, 1998.

Outsourcing often goes hand in hand with the process of restructuring a company. The interaction goes both ways. On one hand outsourcing can be a part of the new structure and a way the company operates in a new setup. On the other hand introduction of outsourcing may initiate restructuring processes.

 
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