Is Outsourcing the Answer? Maybe. Maybe not.

In NBC’s comedy Outsourced,Todd Dempsy (Ben Rappaport) moves to India to manage the company’s newly outsourced call center.  When he meets the team he will be managing he discovers that they have little to no understanding of the product-line and how to engage with customers in a culturally appropriate manner.  The show is a great illustration of the need to give serious thought to: 1) Should I outsource?; and 2) To/with whom?

While outsourcing is fast becoming the successful business battle cry, it is not the panacea.  You need to determine your company’s core competencies and how you can deliver the best value to your customers.  Are there services at which your company does not excel, or non-critical services which could be carried out more efficiently/effectively if the service were outsourced?  If so, you may want to think about outsourcing.

Look before you leap

However, before making the decision to outsource, consider the hidden and long-term costs which can potentially be expensive.  Additionally, it is important to weigh the risks of losing customers or market share.

Acquisition?

If, through evaluation and analysis of your core competencies and value proposition, you believe you have the capability but not the technology, you may want to consider acquisition.  Explore the competencies of small and/or niche companies in the technology, logistics, and supply chain industries.  There are many such companies that have unique capabilities in terms of technology, talent, and/or customer depth or growth.  Would acquisition make more sense than outsourcing?  How would this impact your company?  Your customers?

If you do decide to outsource, think carefully about what company you want to partner with.  I’ve previously written about what to consider when choosing a partner.

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