Outsourcing can bring many benefits, assistance and savings to your business but there are many things to consider such as the quality of services from outsourcing providers can vary and which of your business core processes should be outsourced.

A good outsourcing business relationship requires a solid commitment in management.

There must be significant efforts from both sides to develop the metrics and legalese to govern a service level contract, keeping it relevant for both client and provider to adhere to. Cost-effective and competent services can be availed from your outsourcing provider but they would need your assistance.

Think of your selected outsourcing provider as a partner, an extension of your business, a reflection– they can only be as strong as you are.

Strategic planning can make sure you can reach the positive and profitable outcomes from outsourcing. It is time to apply SWOT.

SWOT Analysis is a strategic planning method devised by business management consultant Albert Humphrey based on data of Fortune 500 companies gathered through a Stanford University research project.

SWOT involves defining business venture goals down to specifics, then identifying the internal attributes of your company as well as the external factors of your business that can be favorable and unfavorable (SWOT:Strengths, Weaknesses, Opportunities and Threats)  to your business venture goals.

When considering a business venture, like for example outsourcing a particular or set of your business core functions, apply SWOT by:

Establish your company’s business STRENGTHS, the internal attributes that can help you in achieving your business venture objectives. What are your company’s resources and capabilities? A strong market, a popular brand name, patents and a good distribution network for your products or services are examples of such strengths.

Determine your business’s WEAKNESSES, internal attributes that harm your progress of fulfilling your business venture objective. These are shortcomings or obstacles that you have to address and overcome internally. The high cost of manufacturing and a weak brand name are examples of business weaknesses.

There are OPPORTUNITIES open to your company, external conditions that can be used for gain, what are they? Are there new technologies, strategies or an undiscovered, unfulfilled customer need that your business can take advantage of for growth and profit?

Survey the THREATS, external problems and conditions positioned to damage your business. Are there trade barriers and emergence of substitute products from competitors that are able to cut your access to your business markets? Defend your business from these threats.

Here’s an example of SWOT application prepared business blogger, Karen Galarpe of the Philippine Daily Inquirer, who applied the analysis method on the Philippine Off-shore outsourcing industry.


1. Strategic location in Asia
2. Infrastructure—well developed infrastructure, redundant and cost-effective telecommunications, and centrally located IT parks
3. Highly skilled labor force
4. Ample support from government and industry associations


1. Scarcity of labor
2. Commoditization of services—non-core processes are easily learned and replicated by others
3. Disorganization of some sectors
4. High cost of power
5. International perception—political instability, red tape/bureaucracy, unclear policies on labor and land ownership


1. Infrastructure—building capacity outside established hubs, or in emerging O & O centers, providing adequate and competent training, refining and enacting policies on data security and intellectual property rights
2. Emerging O & O segments—in particular, the knowledge process outsourcing
3. Globalization


1. Labor migration and attrition
2. Emerging O & O providers

Your business ventures will not be a SHOT in the dark through outsourcing with SWOT.

SWOT Analysis and careful strategic planning go a long way in  helping your business achieve the best results from outsourcing.

Outsourcing Solutions, Inc. – your outsourcing partner!


  1. Galarpe, Karen. “What’s a SWOT?” 1 September 2008. Blogs–Open for Business. Accessed 4 September 2008. Link here
  2. Galarpe, Karen. “SWOT: The Philippine outsourcing and offshoring industry” 3 September 2008. Blogs–Open for Business. Accessed 4 September 2008. Link here
  3. Lovelace, Herbert. “Outsourcing isn’t always the Answer.” 4 October 2004. Information Week. Accessed 4 September 2008. Link here
  4. “SWOT Analysis.” 11 August 2003. Wikipedia–The Free Encyclopedia. Accessed 4 September 2008. Link here


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