Outsourcing is the strategic use of outside resources to perform activities traditionally handled by internal staff and resources.

Outsourcing is not a new concept. Companies have always hired specialist subcontractors for particular types of work, or to level-off peaks and valleys in their workload. They have always partnered and formed long-term relationships with firms whose capabilities complement their own; companies have always contracted for shared access to resources that were beyond their individual reach whether it be buildings, processes or people.

But the difference with simply subcontracting and outsourcing is that outsourcing involves the wholesale restructuring of the corporation around core competencies and outside relationships.

Are you an outsourcing candidate?

• Are your current human and technical resources being utilized effectively?
• Does the department's purpose (i.e. payroll, PC maintenance, network management) directly enhance the company's ability to deliver its product or service?
• Is having this capability or knowledge in house adding to your core competence? 
• Are the current resources capable of handling any new technology or procedures in their field?
• Is there a quicker, more effective method to handle these issues? 
• Should you consider an offshore solution?
• Are any savings from outsourcing for real; what are the after-shock effects?
• Will employees have a basis for litigation? What are their options?
• If I make the wrong decision on outsourcing, what are the consequences?

Common reasons to outsource :

• Access to additional resources 
• Free up human and asset resources for other purposes
• Accelerate reengineering efforts or migration to new technology
• Improve business efficiency
• Short term access to specialist management or technical resources
• Share risks
• Reduce and/or control operating costs
• Improve company focus on core competencies
• Enable quicker response to business drivers and new trends
• Transform capital expenses and fixed assets to flexible monthly expenses
• Transform unknowable monthly expenses to a more defined fixed fee.

Outsourcing of IT services

e.Commerce, intranets, e.Procurement and integrated enterprise-wide systems place huge pressure on IT staff, who require constant training. The demands on the network infrastructure in particular, are constantly growing in volume and complexity, and an IT department can quickly become the largest in a corporate head office as it gears up to cope with "peaks" rather than "averages".

The risks of network downtime increase exponentially as companies rely more and more on electronic rather than manual systems.

In turn, senior executives and boards of directors are looking for new ways to remain competitive, increase shareholder value. It is becoming necessary to quickly integrate new technologies and even merged/purchased companies into their businesses. These are handled as short or medium term projects, which require specialist skills. Outsourcing is the most cost effective way of quickly gearing up and down to meet these demands.