Strategic Outsourcing

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Strategic Outsourcing
Strategic outsourcing is the process that has been adopted by many companies to get services from service providers other than having in-house departments that carry out these tasks. Companies worldwide have been engaging providers of critical services that they feel it would not be cost-effective to handle them internally. This article by James Quinn and Fredrick Hilmer takes a critical review on the forces that push companies towards outsourcing of the services and how companies can leverage on their competencies available within the organization (Quinn & Hilmer, 1994 p43). The move to strategic outsourcing is necessitated by the need to use all the competencies available in an organization optimally and gain competitive edge in the market. The writers of the article Strategic Outsourcing are concerned with suggesting ways that the management of organizations can uses to ensure that their organizations leverage on the available competencies within the organization while at the same time to get an understanding of which services can be outsourced cost-effectively. The risks and benefits of outsourcing of services have been reviewed by analyzing the operations of many different companies and the strategies they have used to ensure profitability (Vagadia, 2011).
Strategic outsourcing is done by companies so as to help the organization in arranging how the organization will be able to successfully utilize its resources effectively to achieve its goals. There are various reasons that may drive a company to outsource services rather than do the intended operations internally (Vagadia, 2011). Outsourcing was developed to enable firms to concentrate on areas which are critical to the organization and which the organizations is well equipped at depending on the resources available. Companies can outsource services and activities which had been known to be integral to organizations’ operations but due to the costs related the services and the capabilities available to the organization proving that it would be cost effective to outsource from a provider (Vagadia, 2011).
Strategic outsourcing provides a platform through which the organization can achieve success in its operations by concentrating and investing in operations and investments that the organizations is best equipped in in-terms of the available resources. Proper handling of the operations by an organization will allow the organizations to adopt strategies that ensure that the firm builds on the competencies on the areas it is well equipped and ensures that it develops into levels that existing and upcoming competitor will not be able to match (Quinn & Hilmer, 1994). Thus the firm will be able to produce quality products or services in the area that it concentrates on and be able to protect its share of the market. Adoption of strategies to ensure maximum utilizations of resources in an organization will also ensure that it enjoys the benefits of the evolving market and technological development by decreasing the risks is faces, lowering the need for more investments and also ensuring that the organization is able to serve the requirements of its customers more e...