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Outsourcing: Debunking the myths and unveiling the realities

September 28, 2011 • Business Process, OPERATION, Supply Chain

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By buyingTeam

Firmly entrenched misconceptions surround outsourcing, and they are holding many companies back from maximising the potential benefits from this fundamentally important tool.

Despite misunderstandings and negative perceptions, the plain truth is that companies of all sizes can benefit from outsourcing, from one-man bands to major multinationals. Decades of experience across industries, sectors and geographic boundaries have generated a wealth of specialist expertise and made a wide range of services available to those seeking support. For this reason alone, it is worth exploding the myths and taking a long hard look at the reality of outsourcing.

Perhaps the most enduring misconception is that outsourcing is all about labour arbitrage. Its most vehement critics accuse employers of destroying well-paid jobs and replacing them with less expensive outsourced labour. Yet this misses the whole point about adding value to a service by leveraging the expertise and resources of specialist external suppliers to the wider benefit of an organisation. Outsourcing enhances the capabilities of a company to deliver a service or skill set more efficiently and more effectively than could ordinarily be achieved internally. If you are CEO of a company like Nokia, for example, it might be worth your while having a large human resources department. But if you are chief executive of a company with 200 or fewer people, you may be unable to afford hiring someone with world expertise in HR.



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