Outsourcing without Compromising Total Involvement and Control

uly 7, 2010 — Outsourcing as a business strategy began gaining prominence in the late 1980s and early 1990s as organizations began looking for ways to diversify to compete globally and to trim costs. Both were accomplished by contracting with a firm that specialized in a service that the buyer either was not set up to perform or could not perform as cost effectively as a supplier.

A furniture manufacturer, for instance, can develop marketing materials and have them printed for in-store use or direct mail campaigns, but it is not staffed to design, write, print and distribute marketing collateral professionally. Outsourcing that type of work makes sense even to the point, for some, of basically contracting with a marketing or advertising firm to provide a turnkey solution and delivery of the final product. The buyer provides guidance but not day-to-day, hands-on involvement. Accounting, legal counsel, human resources and building maintenance are among a host of other disciplines that are popular to outsource.

When buyer organizations began outsourcing some of their core competencies, such as the cutting of wood to precise dimensions for furniture making, then outsourcing was escalated to what is called a strategic partnership. Information technology and customer service often are outsourced as strategic partnerships, but the distinction between outsourcing and forming a strategic partnership can be opaque depending on how the buyer organization defines its core competencies. Regardless, whether it is called outsourcing or a strategic partnership, the buyer organization is using outside resources to perform activities traditionally handled by internal staff with internal resources.

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