In the past few years or so, the discussion regarding outsourcing has gained strength. People from Europe and USA are more concerned about outsourcing, as it has led to decrease in job opportunities. But why does one opt in for outsourcing? Can anything be outsourced?
Why Outsourcing?
The number one answer for this question is that it is not one’s core competency. The age of Do It Yourself has gone. With the increase in market exposure and growth of Internet, anyone can practically pose a challenge to one’s core competency if one does not manage it very seriously. Taking your competition for granted can become a nightmare for one’s business. And the news spreads like fire and becomes a joke among peers.
Can Anything be Outsourced?
The answer is yes – unless it is your core competency. For an advertising agency, it makes sense to focus on their advertising business, rather than managing other things like logistics and networking. But when you choose some one as a partner for outsourcing, you must ensure that the organization you deal with has got a very good expertise in managing it. Also there should be some SLA and Non Disclosure Agreement signed. But there are some industries where there is no possibility of outsourcing, like defence. When your industry handles some very sensitive information it is advisable not to outsource.
Case Study – Computer Networking
Since I work in Telecom, I know about outsourcing of networking infrastructure. Some challenges you might face are:
- You grow bigger, adding more locations and expanding to more geographies
- You acquire a company. Integration of existing network infrastructure and the acquired one becomes a big challenge.
- You consolidate various business verticals into one, to achieve cost effective operation
- Managing a data centre for your business becomes a very big headache
I have heard many people having arguments against network outsourcing like:
- You get benefits of depreciation
- You have more control over things
- You can run it in a more cost effective manner
Personally, I feel that these are myths. There is no reason why I can support these arguments. You do not get the benefit of depreciation – it will be offset by increasing expenditure in Human Resources and Networking Infrastructure. You need to train your people to handle each and every scenario, there would be salary increments and other perks. So you are losing more money than what you get from depreciation.
Having control over things has got nothing but a comfort level. But it boils down to the question if you want to control the things or want to run something smoothly. If you want to have control of each and everything and has time to control and monitor, then you can not find a better replacement than yourself. But if you fall in the latter category, then outsourcing that work may be a better thing.
Cost effective operation is a myth as I pointed out in the previous paragraphs. In order to save some money, you are spending more of your valuable time doing something you are not that good at. Does it really make sense? For me it is not. From my personal experience I spent more time managing servers trying to save some money. But in the end, I realized that there is no saving, but I end up wasting my time trying to do things for which I can not devote more time. During the time I spent for fixing my web server, I could have done some better things.
