Managing the Outsourcing Process

8 Pages 1970 Words

ch by a vendor or vendors. There are two important criteria for deciding what functions to outsource:



The strategic importance of the functions.


In-house personnel’s ability to perform the functions.


Functions or activities that are not strategic to the organization’s core competence and that the personnel cannot perform cost effectively are excellent candidates for outsourcing. Conversely, functions that are strategic to the core competence and that the personnel can perform cost effectively should be kept in the organizations because of their strategic importance for organization’s future (Gerston 1997).


C-Making Outsourcing Decision

Outsourcing initiative is a very important process that influences all organization’s future. According to this, top management should consider on this subject carefully. Top management should decide whether it is better for the organization to outsource its functions, determine which functions are completed by vendors, consider how well organization’s culture will support an outsourcing decision (Laabs 1993). In addition to this, three factors that directly influence the top management’s decision are the number and the capability of outsourcing vendors, advances in technology, and competition (www.corbettassociates.com/main/resource/research/preview/outrev.html).


D-Evaluating Outsourcing Strategy

After making outsourcing decision, top management should evaluate the outsourcing strategy. Top management initiative is so important for a successful outsourcing application. When top managers evaluate outsourcing strategy, they should consider on the organization’s core competences, the barriers raised by the corporate culture, the cross-functional impact, goals they want to achieve from outsourcing, kind of relationship with a vendor, the personnel issues (www.outsourcing.com/news/calendar.htm); make sure that organization’s goals for outsourcing are clear;...