Outsourcing Benefits during recessionary times

During this global economic crisis more and more companies are considering to cut costs and increase technology expertise at the same time. From that perspective outsourcing is seen as liveable way to cut the costs, but shaky economy requires firms to do their outsourcing much more cautiously than ever before.

“Whenever there is a downturn people outsource more, not less,” stressed Linda Cohen senior analyst of Gartner. “Companies want to take costs out wherever they can. CFOs are pounding in to their CIOs to just outsource everything, just offshore it.”

In today’s tough economic environment organizations have to carefully weigh all benefits and risks of sending work to outsourcing providers as well as once again reexamine what might be outsourced and what should stay in-house. IT leaders may forget all lessons they learned rushing into bad outsourcing agreements and chasing elusive benefits.

Nevertheless, outsourcing model can provide companies with substantial benefits to bring in service providers on the single-purpose basis without investing to permanent operational costs and hiring new employees. Moreover, outsourcing providers continually invest in the latest technology and develop their skills, offsetting expenses by sharing technology among several clients. Mostly, outsourcing provider is specialized on the specific operation you consider to outsource, and his experience, talent and technology might be as good or better than you can re-create internally.

Peter Mauthe, the president of Dallas-based Rhoads Lucca describes outsourcing as a driver for growth. “It’s a crucial factor for us being able to grow our business. It allows us to focus on our business,” he stated. “We could increase the size of our company five-fold in revenue and only hire five or six more people, because we outsource so much of the really technological skills, such as accounting and IT.”

By outsourcing non-core functions, organizations can concentrate on their main business rather than getting stuck in operational services. Especially, taking today’s recessionary times when budgets are so tight and firms can’t afford to pulverize their efforts broadly. According to recent studies the main priorities for technology industry in 2009 will be on the one hand an innovation, as the vital element of the fight for scrupulous customers and on the other hand an efficient IT organization, as the part of dilemma for CIO’s “how to do much, much more with potentially much, much less”. In both challenges CIO’s will have to figure out how technology can help and how IT service provider could be an efficient partner in innovation.


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