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Article Surfing ArchiveFour Ways To Make The Case For Outsourcing - Articles SurfingIn a previous column, we examined how to generate leads for outsourcing assignments. But how do you convert those leads into clients? You may need to make the case for outsourcing. "Businesses today are kicking into survival mode," says Bill Allison, managing director for the Pacific Southwest Management Solutions & Services Group at Deloitte & Touche. "With a sluggish economy and increased competition, shrewd executives turn to outsourcing as the most cost-effective strategy to meet the bottom line and seek a higher return on investment." Outsourcing, especially in the information technology (IT) arena, is a mechanism that allows businesses to compete effectively and sustain market dominance in the future. According to Allison, it is something most midsize companies should think about if they want to be poised for success. Here are four arguments he suggests you can make in favor of IT outsourcing. 1. Time efficiency Outsourcing eliminates the challenge of fixing IT problems (e.g. the system is inefficient, the space capacity is limited), as well as the time spent on recruiting and retaining skilled IT work force. Dedicating less time to IT issues allows a business to deliver a higher rate of customer satisfaction and more time to focus on new opportunities. 2. Cost-effectiveness 3. Rapid time to market 4. Best practices However, outsourcing decisions that are not carefully strategized will prepare you for declining market share and decreasing margins. Businesses considering outsourcing should develop an "internal characterization." If you were your own customer, what would you like to see improved, emphasized or removed altogether? An honest answer usually requires a fresh, outside perspective that is handled by an unbiased party qualified to take a holistic view of your business. Internal characterizations performed with in-house personnel might capture the issues, but peering into the mirror can be more effective with a neutral set of eyes. A mistake to be avoided is basing your outsourcing decisions on what you think you are good at, instead of what you should be good at. As for deciding whom to outsource to, ask yourself, "What is the basis of competition in the outsourcing vendor's industry?" Is your vendor appropriately integrated to deliver against the dimensions of performance that matter most to you? If so, you have made the right choice. If not, look elsewhere.
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