| Definition |
Outsourcing is the removal of direct involvement with a particular function in favour of a third party who specialises in the performance of that function. Outsourced function providers have the benefit of specialising in a particular area and thereby harbour expertise in that field along with benefits arising from economies of scale. |
| Implementation |
Outsourcing requires a clear understanding of the motivation behind the outsourcing process and the requirements of the organisation that are planned to be outsourced. A successful implementation requires identification and evaluation of the following:
- Which services can be moved without compromising a competitive edge?
- Which partners have proven expertise in the desired requirements?
- How is the partnering process structured across borders?
- How is business continuity assured during the transition process?
- How are service levels evaluated and controlled on a daily basis thereafter?
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| Purpose |
Outsourcing enables an organisation to distance itself from functions that add less value compared to functions which are part of their core competencies. By taking advantage of the specialised knowledge of partners whose core competency exists in particular fields, resources of the organisation can be better employed to maximise the added value of the organisation without distraction. With economies of scale that can be achieved by a partner specialising in one area, the potential for savings is often a key motivator for outsourcing. |
