Outsourcing Is Able To Do More than Merely Cut Costs

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Offshoring and outsourcing started as a cost-cutting measure; however, companies which develop actual sustained value regularly utilize them for more strategic ends–in order to gain abilities which they do not have in-house, or strengthen abilities they do have. It has been discovered that 85 percent of those winners utilize capability-sourcing strategically and broadly for everything from developing world class skills to bringing fresh products to the marketplace faster and allowing business model innovation. In other words, they have moved way beyond simple cost-cutting.

Based on experts’ research and expertise with clients, it has been discovered that top businesses utilize capability-sourcing to construct 5 strategic capabilities:

•    To tap global talent
•    To build up partnerships which both reduce risk and capture value
•    To seize fresh local marketplace opportunities
•    To boost innovation and get to market quicker
•    To disrupt business models of a traditional nature

Being a follower does have benefits in capability sourcing. Quick followers are able to learn from other peoples’ mistakes. There will include capability sourcing models, as well as offshore locations and vendor choices today which did not exist 5 or ten years ago, offering the opportunity to catch up quicker. It has been discovered that building up a local offshore team with an independent charter, as well as autonomy will improve an organization’s long-range opportunities of success. For instance, GE used offshoring in order to develop its biggest integrated, multidisciplinary R&D hub, inside India. The hub supported the company on a global basis and fostered a massive Indian talent pool that has solid onsite leadership.

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