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Outsourcing: Outsourcing Professionals
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Outsourcing ... allows companies to focus on other business issues while having the details taken care of by outside experts. This means that a large amount of resources and attention, that might fall on the shoulders of management professionals, can be used for more important, broader issues within the company. The specialized company that handles the outsourced work is often streamlined and often has world-class capabilities and access to new technology that a company couldn't afford to buy on their own. Plus, if a company is looking to expand, outsourcing is a cost-effective way to start building foundations in other countries.
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You should probably rethink your outsourcing options if you are in it for the cost benefits. A survey by outsourcing advisory firm TPI has found that the outsourcing of information technology and business services results in an average savings of only 15 percent, a far cry from the 60 percent cost reduction claims. With salaries paid to professionals, severance pays, and governance costs making a huge dent in the company budget, organizations are left with only 10 to 39 percent as savings. There's some good news though for those who prefer quality to quantity though; around 21 percent of companies have now outsourced to enhance quality, a substantial increase over the 11 percent that did so in 2004.
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In all cases, outsourcing success depends on three factors: executive-level support in the client organization for the outsourcing mission; ample communication to affected employees; and the client's ability to manage its service providers. The outsourcing professionals in charge of the work on both the client and provider sides need a combination of skills in such areas as negotiation, communication, project management, the ability to understand the terms and conditions of the contracts and service level agreements (SLAs), and, above all, the willingness to be flexible as business needs change.
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Although HR professionals reported benefits from outsourcing, they ... reported the major obstacles they faced in the decision to outsource HR functions. The largest obstacles were fears that customer service to employees might be affected (64 percent), fears about loss of control (51 percent), and concerns that outsourcing might impact company culture (33 percent).
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Outsourcing Professionals