Historically, many businesses chose a single vendor to outsource too, but the trend is now to have multi-sourced agreements which are more challenging to manage and control.
Whether you like it or not outsourcing has become a feature of business life. We have seen an increasing number of companies that are either seeking to outsource complete business processes or looking to use managed services to support their core business functions. It is most mature in the IT sector, but has developed into areas such as HR, Procurement, and customer service, payroll services and more.
There can be a number of benefits to this approach which might include:
- Lower costs due to economies of scale and flexible capacity.
- Allowing you to focus on your core competences.
- Getting access to skills or resources that you don't have within your organization.
- Accelerating speed of development and time to market.
- Increased efficiency.
- Lowering ongoing investment internal infrastructure.
- Increased flexibility to meet changing business and commercial conditions.
However, this strategy is not without risks, including:
- A lack of control.
- Slower turn-around times.
- A lack of specific business or domain knowledge.
- Quality control issues.
- Increased efficiency.
- Costly variations from the contract.
- Multiple lines of communication.
